Discussion of the Importance of International Trade to Uk Business Organisations
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- Category: Politics: Economics
- Date Submitted: 05/26/2014 02:11 AM
- Pages: 5
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The buying (importing) and selling (exporting) of goods and services between countries within the European Union (EU) is known as international trade (BPP, 2007).
International trade is the backbone of the modern, commercial world, as producers in different countries try to profit from an expanded market, rather than be limited to selling within their own boundaries. Without international trade, businesses would not be as profitable and economies would be poorer (Louis, 2014). This type of trade is important as it promotes and encourages the growth, movement and purchase of different goods and services from one country to another.
There are various reasons that international trade occurs, including lower production costs in one country compared to another. Lower production costs of particular products or services within the UK, compared with other countries are achieved by making use of natural resources such as labour, capital and land. Natural resources in the UK include grassy farmland for rearing chickens for food production in factories such as Moy Park Chicken Factory. The UK has the comparative advantage where the opportunity cost of production is lower than compared with countries such as Spain. Other examples include Sheffield steel which was mass produced relatively cheaply in the past. At present, fracking and alternative energy resources are becoming increasingly popular for use as natural resources so that oil and gas do not have to be imported.
As an exporter, UK can make good use of its natural resources and can produce and export superior products or services efficiently i.e. concentrate on specialised industries so that people do not need to be self-sufficient. The UK can import products such as wine that it would produce inefficiently because of the lack of natural resources required.
New technology can be imported into the UK which speeds up growth of technology and innovation. Investment goods can also be imported which stimulates...
International trade is the backbone of the modern, commercial world, as producers in different countries try to profit from an expanded market, rather than be limited to selling within their own boundaries. Without international trade, businesses would not be as profitable and economies would be poorer (Louis, 2014). This type of trade is important as it promotes and encourages the growth, movement and purchase of different goods and services from one country to another.
There are various reasons that international trade occurs, including lower production costs in one country compared to another. Lower production costs of particular products or services within the UK, compared with other countries are achieved by making use of natural resources such as labour, capital and land. Natural resources in the UK include grassy farmland for rearing chickens for food production in factories such as Moy Park Chicken Factory. The UK has the comparative advantage where the opportunity cost of production is lower than compared with countries such as Spain. Other examples include Sheffield steel which was mass produced relatively cheaply in the past. At present, fracking and alternative energy resources are becoming increasingly popular for use as natural resources so that oil and gas do not have to be imported.
As an exporter, UK can make good use of its natural resources and can produce and export superior products or services efficiently i.e. concentrate on specialised industries so that people do not need to be self-sufficient. The UK can import products such as wine that it would produce inefficiently because of the lack of natural resources required.
New technology can be imported into the UK which speeds up growth of technology and innovation. Investment goods can also be imported which stimulates...