there are several factors that encourage all countries in the world to do foreign trade. The driving factors consist of the following. The goods that a country can produce depends on its natural resources. This resource difference also depends on the conditions of the region in the country.
each country has different technology, so the goods it produces are also different. These differences are what encourage the exchange of goods between countries. These technological differences allow a country to study more modern production techniques and import more modern machines or tools to realize better techniques and production methods.
production cost savings
international trade allows a country to produce goods in large quantities so that the cost of production becomes low.
Difference of taste
every country in producing goods, possibly have in common. Nevertheless every country has different tastes. This is what drives interstate commerce.
Each country can conduct production specialization
international trade can encourage each country to specialize production by utilizing resources nature, labor, capital, and expertise to the full
Benefits international trade
international trade is an important activity in every country. There is no one country in the world that does not trade internationally. Those who do international trade, of course, feel the benefits. Here are some benefits of international trade.
Improving international friendship relations
the existence of interstate commerce, can realize relationships among countries that trade. This relationship if well established can enhance friendly relations among the countries. They can be more familiar and help each other when experiencing difficulty in meeting the needs
Different foreign currencies
in general the currency of each country is different. This difference can hamper interstate commerce. A country that does export activities, usually asks the importing country to pay by using the country’s currencyexporter
Low quality resource
the low quality of labor can hamper international trade. Why? Because if the human resources are low,then the quality of the production will be low as well. A country that has a low quality of goods, will be difficult to compete with goods produced by other countries with better quality.