What is foreign trade? Foreign trade is the buying and selling of goods and services across national boundaries.
Foreign trade can also be termed as international trade. Trade between two countries for the purpose of exchanging goods and services can be a free trade, mutual agreement, bilateral or multilateral.
Foreign trade, also known as international trade or global trade, refers to the exchange of goods, services, and capital between countries. It involves the buying and selling of goods and services across international borders, typically through imports and exports.
Foreign trade plays a crucial role in the economic development of nations, as it allows countries to specialize in producing goods and services that they can produce efficiently and at a competitive advantage.
This specialization leads to increased productivity, economic growth, and higher standards of living.
There are two main types of foreign trade:
Import: Imports refer to the goods and services that a country purchases from other countries. Countries import goods and services that they either do not produce or produce at a higher cost.
By importing these goods and services, countries can meet domestic demand, access resources and inputs not available domestically, and offer consumers a wider variety of products.
Export: Exports refer to the goods and services produced domestically and sold to other countries. Countries export goods and services to generate income, create job opportunities, and stimulate economic growth.
Exporting allows countries to take advantage of their comparative advantages in producing certain goods and services, thus earning foreign exchange and improving their trade balance.
Foreign trade is facilitated through various mechanisms, including international agreements, trade policies, tariffs, quotas, and free trade zones.
Governments often implement trade policies to regulate and promote foreign trade, protect domestic industries, and address trade imbalances.
International organizations, such as the World Trade Organization (WTO), play a significant role in promoting and regulating foreign trade.
The WTO establishes rules and agreements that govern international trade, encourages fair and transparent trade practices, resolves trade disputes, and facilitates negotiations among member countries.
Overall, foreign trade fosters economic interdependence among nations, promotes global cooperation, and contributes to the growth and development of economies worldwide.
It allows countries to benefit from their unique resources, skills, and capabilities while providing consumers with a wide range of goods and services at competitive prices.
How is foreign trade carried out?
For Foreign trade to effective there are modalities to follow. There are also international currency for trading between countries which at the present is the US dollars.
To engage in foreign trade you have to understand the international exchange rate and forex trading. The government of any nation is saddled with the responsibility of setting how much they want their local currency to be exchanged with the dollars which is the international trading currency.
Agencies for foreign trade
In every country, there are so many agencies that involved in foreign trade. There are international buyers, shipping companies and local sourcing agents.
Its important to understand the various process involved in foreign trade. There are also scammers everywhere so be very careful if you are interested in going into export and import trade.
How to find legit foreign trade agencies
To find a good foreign tradig or import and export companies that are legit, you have to do a due diligence search.
The first place to start from is to check your local directories or go to the nearest local government offices around you. You can run an online review and check out the comment sessions.
If you cannot find sites on foreign trade then search for international trade agencies around you using Google listings and local directories. There agencies like Alibaba and many more to choose from.
HOW MUCH I CAN HAVE TO START INTERNATIONAL/FOREIGN TRADE?
Sometimes when you take a look at those people that has made big fortunes doing international trade you are tempted to believe the theory of having a large chunk or sum of money before you can engage in international trade but the reverse is the case with modern shipping and online agencies that are scattered everywhere across the globe.
With agencies like Alibaba using their website you can start the business of importation with as low as $100. What you need is proper address documentation and a working line preferably for WhatsApp line.
So what are the benefits of engaging in foreign/international trade?
Not to limit or give you a false view of the several benefits of international trade, I am going to list a few importance of foreign trade, these are as follows
With the help agencies like Alibaba, Ebay, Amazon, Jumia and Konga online shopping you can easily buy stuffs like phone, footwear, clothes, car and anything your purchasing power can afford.
There also agencies that offers free shipping with coupons
It creates revenue through foreign exchange using commercial bank forex trading platform
International trade makes it possible to enjoy products not produced in your country of residence through import trade
Foreign trade can easily boost local currency
does government control foreign trade/international trade
technically we can say government does not control individual persons involved in international trade but then in every transactions done the government makes money through bank rates, import duties, export duties, duty stamp and through custom charges.
The central bank of any nation directly or indirectly controls international or foreign trade.
TYPES OF FOREIGN TRADE
There are basically two to three types of foreign trade. These are described based on the process involved in the trade. The three types of foreign trade are listed below
Export trade; this type of trade is the sale of goods like raw materials and finished goods to other nations or countries of the world. Export trade can be visible or invisible
Import trade; import is a type of trade that concerned with the buying of goods ranging from raw materials, cars, electronics and clothing. It can also be involve in the import of xcservices through corporate or government outfits
Entrepot; this the act of solely importing goods in order to re-export them to other countries. This topic will be treated in in subsequent posts. An entrepot is also called re-export trade
international agencies for foreign trade
There are several international agencies and organizations that play a significant role in facilitating and promoting foreign trade. Here are some of the most prominent ones:
World Trade Organization (WTO): The WTO is the primary international organization responsible for overseeing and regulating global trade. It provides a platform for member countries to negotiate trade agreements, resolves trade disputes, and establishes rules and principles for international trade.
International Monetary Fund (IMF): While not solely focused on trade, the IMF plays a crucial role in promoting international economic cooperation and stability. It provides financial assistance and policy advice to member countries, including those facing balance of payments issues related to trade.
World Bank: The World Bank focuses on reducing poverty and promoting economic development. It provides financial and technical assistance to developing countries for infrastructure projects and other development initiatives that can facilitate foreign trade.
United Nations Conference on Trade and Development (UNCTAD): UNCTAD assists developing countries in their efforts to integrate into the global economy and benefit from international trade. It conducts research, provides policy advice, and offers technical assistance on various trade and development issues.
International Trade Centre (ITC): The ITC is a joint agency of the WTO and the United Nations. It aims to promote sustainable and inclusive trade by assisting small and medium-sized enterprises (SMEs) in developing countries to enhance their export capabilities and access international markets.
Organization for Economic Cooperation and Development (OECD): Although primarily focused on economic policy and development, the OECD also addresses trade-related issues.
It provides a platform for member countries to discuss and coordinate policies, including those related to trade and investment.
Regional Development Banks: There are various regional development banks, such as the Asian Development Bank (ADB), African Development Bank (AfDB), Inter-American Development Bank (IDB), and European Bank for Reconstruction and Development (EBRD).
These banks provide financial resources, technical assistance, and policy advice to promote economic development and trade within their respective regions.
These international agencies and organizations work together to promote trade liberalization, provide technical assistance and capacity building, support developing countries, and resolve trade-related disputes.
Their efforts contribute to fostering a more open, transparent, and inclusive global trading system.
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79. WHITE FLY SEED BUGS
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83. GREEN SPIDER MITE