COMMERCE 101

FOREIGN TRADE

Hey Guyz, Alot has happened let me gist you. Lolz. So it's been a while since I posted and thats because I was concluding plans to launch my second blog, this one would be a personally-run blog no other Authors and it's so exciting. I will release more info when its ready. That aside, well we know some of you would like to have other subjects/courses covered on this site so we have been searching for the right Candidates for these Positions and GOOD NEWS!!!, we found someone. She has been a friend for a while now and she would be taking ENGLISH LANGUAGE, CRK & GOVERNMENT watch out for her posts she would soon be posting on this blog. Just check out the tabs on the top of the page with the names of the subjects- plans are still on the way to get more Authors to take other Subjects especially for my Science Peepz. You are special and we are working hard at finding suitable Authors for your Courses, pls exercise a little more patience which we know you have already been doing but still a little more.  To crown our gist, we are now a .com site no longer a .blogspot.com- did you notice, even though you type the .blogspot.com address on your browser it redirects you to our new site name which is- edu-made-easy.com. Hurray!!!!. it has been a desire that we reduce the stress of typing in our long name -lolz so we made it shorter without losing the essence and

the real name which is- Edu-made-easy. Hope this is a welcome development to you, pls share your thoughts with us by sending a mail to- dividiamond@gmail.com. Thanks and God Bless.

Now let's get back to our Topic for Today.

Foreign Trade is the exchange of Goods and Services between two or more countries, It is the trading of goods and services between country borders of more than two countries. It can also be referred to as INTERNATIONAL TRADE.

TYPES OF INTERNATIONAL TRADE:

* Bilateral Trade is the exchange of goods and services between just two countries be it in the same continent or cross-continental trade as far as it happens between two countries or between two citizens of two different countries; then it is bilateral trade. For Example, The Importation of Rice from Thailand by Nigeria is Bilateral because it involves two countries- Nigeria is the Importer while Thailand the Exporter of one commodity Rice.

* Multilateral Trade is the exchange of goods and services between more than two nations and between more than two country borders. This is little bit more complicated than the first because it could be between ten countries, five countries or nine countries- it's all multilateral trade.

REASONS FOR FOREIGN TRADE:

# Pre-distribution of Natural Resources- This is a reason why there is foreign trade because some countries and places are blessed with Natural Resources, while others aren't. So countries that need a resource like oil for instance are forced to trade with oil-rich countries, in order to meet its own need of oil in exchange for money.

# Climate Condition of the Earth- The Climatic condition of the earth varies from place to place and from country to country. This enables difference in agricultural produce of different countries in the world. You hear things like, our soil can only produce this and that and not that. For Instance, The soil in my country Nigeria can't grow Apples(both green and red) so we import Apples from South Africa and other countries in other to meet our need for apples. This is foreign trade.

# Difference in Skills and Technology- Countries vary in level of Technology and Skill, for instance a state in my country known as BAYELSA is located in water so they are good in Fishing, therefore for other parts of Nigeria to get fish they would have to get it from Bayelsa, this is basically it. When a Country has an Advantage as a reason of maybe location in producing a Product, others who lack that advantage( skill) would have to get that produce from the Advantaged Country.

# More Customers- Foreign Trade exists today because, Countries that have excess of a Product would want to sell and who better to sell to than the neighboring country that lacks that product.

ADVANTAGES OF FOREIGN TRADE:

·         It is a Source of Revenue for the Government of a Country.

·         It enables Countries to specialise in the Manufacture of that Product they Export.

·         When a Country is known for selling a particular product then Ideas start coming on how to improve the quality of the product.

·         The Importing Nation can invest heavily in the Exporting Country thereby producing Employment for indigenes of that country( exporting).

·         It increases the standard of Living of the citizens in the exporting country because they would be money in the system as well as more jobs for the indigenes.

·         It creates relationship between countries, it gives them an excuse to interact and co-exist.

DISADVANTAGES OF FOREIGN TRADE:

v  It can weaken the activities of Local Industries for example, An Ankara company produces Ankara for the citizens of a country, and it is a blossoming company- then a foreign company starts importing lace. More and more people start patronising the lace company and therefore Ankara is abandoned and eventually folds-up.

v  It can put the lives of the citizens of the Importing Country at risk, this is because some wicked business men can start importing cheaper versions of the product that are compromised in terms of quality thereby endangering the lives of the citizens.

v  For the exporting country it can result in unexplainable increase in price of the commodity and the hoarding of the goods by producers from customers for the sole aim of making it available for export which would pay more rather than local consumption.

v  It reduces an Exporting Country's control over its own economy because most times, industries from the importing country would come and set up their own establishment in the exporting country thereby reducing the cost on them and putting other similar companies at the risk of folding-up.

This brings us to the end of today's session. Hope this was very helpful to you, leave a comment of what you think of this tutorial and of your questions below. Have a Blessed Day and Remember You are Amazing. God Bless.