1 . Describe the importance of foreign trade in our global economy. Foreign trade is the business transaction among different countries. Foreign trade occurs for mutual satisfaction of wants and utilities of resources. Countries import what they are lacking and exports what they have. Foreign trade allows for a greater competition and more competitive pricing in the market. For example, Toyota motor company which is Japanese company having their branch in different country. Foreign Trade is very important in global economy.
One of the importances of oreign trade is create more choices. When foreign trade occurs, there will be more foreign business that comes in doing business in local market. This helps in providing better choice to the consumers and provides varieties to the consumers. For example, when there is foreign trade carries out; Malaysian can have different choices of bags like Louis Vuitton, Coach, and Prada that from foreign country. The next importance is increase the quality of the products. When there is foreign trade, there will be competition and the local firms can feel the threat.
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Thus quality and standardized products are produced to attract customers to make sure that they can sustain in the market. For example, When Padini breaks into the local market, the local clothing manufacturer will try to improve their quality to attract the customer to buy the clothes. Besides that, foreign trade helps in generating employment opportunities. This is because when there is foreign trade, labour will be needed. This will automatically create Job opportunities. Improve the standard of living of the people is also one of the importance of foreign trade.
Foreign trade can provides more variety of choices of goods and services. By consuming new and better varieties of goods, people can improve their standard of living. Besides that, foreign trade create Job opportunity, this will increase the income of the people. Thus, the standard of living of the people can be improved. As the conclusion, foreign trade is very important in our global economy. It creates more choices for the consumers, creates Jobs opportunities, and improve the quality of the products.