BENEFIT OF INTERNATIONAL TRADE

Benefit of International trade is enjoyed by both, the exporting nations as well as importing nations.

Some feel that the commodities imported is the actual benefit of international trade, whereas, export activities involve a lot of expenses. The "Balance of Payments", including payment for services as well as goods; yearly capital fluxes entering in and moving out of a country, is more or less stable and remains in equilibrium and requires few adjustments.

Studies have revealed that United States of America, has a highly competitive market, and by investing in America, the returns are good. Benefit of international trade is also evident from the inflow of capital into bonds, real estate industry, stocks, securities(government), which has escalated from USD$58 billion to a whopping USD$733.4 billion in the last few years. In the year 1997, United States of America, had a inflow of capital, worth USD$254.9 billion. As trade deficit became three times, between the years 1992 through 1997, economy of United States of America, made headway by 24% in the industrial sector. Progress in the manufacturing segment registered a growth of 27%.

The most evident benefit of international trade are summarized below:

• International trade has reduced inequalities and facilitated growth in economy of different countries.
• Studies revealed that majority of the countries of the European Economic Community, manifested very little tendency towards convergence in income during the period 1870 through World War II.
• Due to international trade, a new trend has been observed. Countries, all over the world are making all efforts to adhere to monetary policies, which have zero inflation, thereby reducing restrictions in trade worldwide.
• After conducting research on international trade, it was found out that if a particular nation reduces its tariffs, it is enough to boost long term growth of the other economies as well. However, if there is unanimous reductions in tariffs, the growth is even faster.
• It was also observed that, majority of the countries, adopted methods of ensuring growth on a long term basis. These countries, manifested a trend, where the levels of income were also high.

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