Fundamentally, promoting international trade enhances the globalization of markets. Additionally, international trade allows countries to expand their markets and access goods and services that are not available locally. Additionally, international trade makes the market more competitive. Consequently, this results in more competitive pricing and brings a cheaper product to consumers. Also, it promotes the rise of the global economy. Similarly, globalization is the integration of markets in the global economy leading to an increase in interconnections of national economies. It is important in financial markets such as capital markets, insurance markets, and commodity markets.
THE BENEFITS OF PROMOTING INTERNATIONAL TRADE
Essentially, promoting international trade leads to the creation of more jobs. Moreover, it increases job opportunities in both countries hence reducing the rates of unemployment. Also, international trade leads to the transfer of technology to developing countries. Additionally, governments in developing countries often lay terms for foreign companies that involve developing local manufacturing capabilities. Furthermore, the globalization of markets involves the selling of goods and services in foreign markets which boosts the competition in the market. Consequently, this forces suppliers to ensure that their prices and quality are competitive enough to meet foreign competition.
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THE ADVANTAGES OF GLOBALIZATION OF MARKETS
The globalization of markets leads to an increase in flows of inward investment between countries which creates benefits for recipient countries. Additionally, these benefits include the sharing of technology and knowledge between countries. Also, globalization enables worldwide access to sources of cheap materials which makes firms cost-competitive hence promoting international trade. Moreover, access to larger markets makes a firm experience higher demand for their goods and services. Resultantly, this enables them to benefit from economies of scale leading to a reduction in average production costs. Globalization also provides an incentive for countries to specialize and benefit from the application of the principle of competitive advantage.
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