The term ‘trade’ refers to the exchange of goods and services. When trade occurs outside the country with another country/organization, it is called international trade.

International Trade or Cross border trade is a crucial aspect of any growing economy. Trade affects the country’s economy and is often measured by the number of exports.

For a particular country, it is merely impossible to produce and manufacture due to a lack of space and infrastructure and a lack of sense of technology and new things. Pakistan, as an example, is a country where there is a growing population, and the need for various products goes on increasing day by day. So there is a need to import specific items which are not accessible in their nations for some reasons, so this spurs the interest for additional imports to Pakistan.

With international trade, the flow of products occurs where different people can get a feel of outside products and benefit by using the same. For example, the urban youth of Pakistan fancy foreign products, and they think that these products are good in quality and advanced. Likewise, even Pakistan exports products that are produced in bulk quantities and gains profits from it, so the economy keeps on proceeding.

Also, International trade helps in building one’s manufacturing unit. Countries nowadays import raw materials from different countries and then make the product in their own country, allowing them to create a cost-efficient product with excellent quality.

Here are some points on the importance of International Trade:

• International Trade all over the world fulfills its purpose of fuller utilization of resources. Most underdeveloped countries struggle to use their mineral resources, so they export their raw materials to developed countries with a demand for their raw materials.

• International Trade ensures that the trading partners get goods cheaper than the countries can get them on their own as every country produces those goods in the production of which it must occur less comparative cost.

• By International Trade, consumers get an opportunity to consume a large variety of goods produced by different countries. This improves the quality of life.

• International trade enables every country to dispose of its surplus production. Some countries produce more than their requirement. They sell this surplus production in other countries and avoid the occurrence of deflationary pressures in the domestic economy.

• International Trade encourages countries to compete in producing various kinds of goods at a low cost of production. Competitiveness stimulates productivity.

• It broadens the degree of the market. Each nation attempts to create various products in enormous amounts. This incites the creation of vast scope and subsequently produces economies of scale.

• International Trade stimulates the spirit of competition among entrepreneurs. 

• Novel production techniques are devised to produce quality goods at a low cost. 

• The advancement of technology is the key to economic development.

• International Trade promotes cooperation among different countries.
  
• It creates an atmosphere of goodwill and friendship. All these are conducive to world peace.