Foreign trade

Importance of foreign trade to a nation Name University Date Importance of foreign trade to a nation Foreign trade also Inter-Regional trade or International trade is trade between different countries. It involves exports and imports. Foreign trade is important as it mutually benefits the countries involved. This puts the nations involved in the global marketplace and result in division of labor and specialization at international level. Nevertheless, foreign trade enhanced the progress of nation`s economy and advanced technology. Basically, foreign trade leads to better and effective utilization of natural resources, develops a broad range of market for nations` products, results in uneven distribution of resources, contributes to the well being of the nations involved, and is considered a boon in meeting natural misfortunes (Kottler & Keller, 2013). This paper seeks to discuss the importance of foreign trade to a nation. Foreign trade is important to a nation in numerous ways. It leads to the development of market for nation`s products and better natural resource utilization. Nations involved in foreign trade often benefit in terms of the well being of their citizens. Foreign trade plays a vital role in a nation`s economic development. This makes it important to a nation. Foreign trade helps in producing comparatively cheaper commodities in terms of cost than others leading to less production cost. Where many nations employ such production mechanism in producing their goods, goods at lower prices will be made available. Foreign trade also widens the market scope of a nation due to both foreign and domestic demand of the product of a nation. This leads to a mass production. The price of products declines where there is an increase in production of goods with a declining average cost (Krueger, 2002). Every nation values own product. A nation uses its product to acquire the products it needs from another nation through foreign trade. In this case, foreign trade is important to a nation in that it enables a nation to acquire different varieties of products in both qualitative and quantitative terms. In this regard, economic development of a nation is assured. For example, steel and iron industry was established because of the stored coal and iron ore. However, the establishment of the industry required import of technical knowledge. Without foreign trade, the industry would be too expensive and difficult to establish in India. Every nation experiences its own consumer challenges. In the event of consumer goods scarcity, nations import goods from other countries while keeping product price stable so as to enable people access their commodities. Economic development is prone to retard where foreign trade is not available. Therefore it is very important for a nation to get involved in foreign trade (Kottler & Keller, 2013). It is important to no...