International Trade and World Output
International trade is the purchase or sale of goods and services between different countries around the world. Trading with other countries around the world is very important and most of the economies around the world have seen an increase over the past ten years. Not only does international trading help those looking to own their own business it also give people in countries around the world more options for goods and services. (Wild, Wild and Han, 2006).
The relation that is between trade and world output is the measure of the world’s output done yearly helps determine the amount of international trade. If there is a decrease in the world output it causes the international trade...
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... to decrease and if there is an increase with the world’s output the international trade also increases. In addition to this, if a country goes into a recession their capital loses it value therefore causing a rise in cost of imports. Regardless of the relations between world output and international trade world output does not grow as fast as international trade. Motley, 2005).
International trade gives countries around the world the opportunity to increase their markets for their goods and services to countries that may not have them available to them in their own country which in turn reveal to consumers different goods and services not found in their own country. In international trading there are many products available around the world such as food, clothing, jewelry, and oil along with services such as banking, tourism and transportation. In the rade and world output world any product that is sold globally is called an export and any product that is brought globally is called an import. Both exporting and importing of products is counted in a countries account in the balance of their payments. (Heakal, 2010). Pattern of International Trade Even though the amount of international trading and world output gives us the awareness needed in the trading environment it does not provide the information of who trades with whom around the world.
In most countries around the world there are custom agencies that document where an export is going, the supplier of an import along with the amount and the value of goods that goes across their borders. In international trade the use of large ocean transport vessels are used to help show the patterns of international trading with the delivering of products from the shores of one country to another one. It has been a proven fact that both Greece and Japan’s merchant ships own around 30 percent of the world’s total capacity, this is measured by the number of tons that is shipped.
With the vast pattern of merchandise trading of products that is done among high income economies around the world makes up for about 60 percent of traded merchandise around the world. Thirty-four percent of merchandise trading is done between high income countries, middle income countries and low income countries and the final six percent of merchandise trading is down between the middle and low income countries. Countries like Greece, Japan, Norway and the United States are just four countries that represent the top ten countries that own the biggest portions of shipping capacities around the world.
Our century is now being called the Pacific century by economist due to what they anticipate for the future growth of the Asian economy along with the possible shift of trade flows from the Atlantic and Pacific oceans. Due to the expected growth of economies in countries around the world managers must make sure that they truly understand how they plan to do business in and with Asia. (Wild, Wild and Han, 2006). If All Trading Stops, What’s Next? If trading around the world would suddenly cease to exist it would cause major confusion in the world.
If Brazil stopped trading with United States we would not be able get certain types of coffee, tea, vegetables and many types of tropical fruits that we are unable to grow in the United States. In addition to these items we will not be able to acquire certain spices, herbs, and certain types of specialty beers only found in other countries. If countries around the world stop trading with each other it would cause consumers to have to go without certain luxuries cars like the Jaguar or Ferrari and Italian leather for the making of leather shoes and handbags.
Other things that we would have to live without from countries like Japan would be electronics that are only made in this country. If China stopped trading with the United States we would not be able to get many types of silks along with other textiles because the country of China is a leading supplier of textiles and apparels since the year 1996. On the other hand if the United States stopped trading with Europe, they would not be able to get American made cars from us like the sports car the Ford Mustang or the luxury car the Cadillac which are only made in the United States.
Europe would not be able to get Angus beef because it is not available to them in their own country. (Motley, 2005). If the United States stopped trading with Finland their country would not be able to get cotton due to the fact that the country of Finland has a cool climate they are unable to grow products like cotton, so they receive it from the United States. The United States on the other hand would not be able to get the plentiful supply of paper and other products made from lumber in Finland.
If all the international trading stopped, job creation that is associated with trading will also stop in many countries around the world. It has been estimated by the United States Department of Commerce that 22,800 jobs are created in countries around the world from every $1 billion growth in exports. It has also been estimated that in the United States alone that there are 12 million jobs that are depended upon exports. (Wild, Wild and Han, 2006). Conclusion
In conclusion the benefit of international trading is something that is needed by countries around the world. Without it the world would be in a great mess because each country would not be able to obtain the products that they have grown accustom to getting from other countries that they don’t have or grow in their own countries. In addition to this the job market would be affected because there would be no creation of jobs due to the loss of international trading.