The economic, political, and social significance of international trade has been essential for the growth of globalisation. The restrictions to international trade would limit the nations to the services and goods produced within its territories, and they would lose out on the valuable revenue from the global trade. Globalisation has not only changed the way we live it has improved efficiency in flow trade and finance, modernised technology for consumers and increased wealth. International trade is the exchange of goods and services between countries.
This type of trade gives rise to a world economy, in which prices, or supply and demand, affect and are affected by global events. Economically it can be extremely complicated especially the fact that all countries whether they like it or not, are related to each other in one way or another. For example, an increase in the price of one commodity such as oil creates a long and complex chain of events which makes analysis of all the causal relationships virtually impossible. The risk of the exchange rates can also be a impact between countries due to the different currencies around the world.
During recession, countries suffer local pressure to change laws governing International trade to protect the local industries. The most painful and memorable of such incident is the Great Depression. However, nations with strong international trade have had the power to control the world economy and this has allowed them to reduce poverty. Trade has also allowed countries to increase in profits and sales which have allowed businesses to expand internationally. Political impacts of international trade are not taken lightly as there may be many impacts which may affect the trade of goods and services between the countries.
The risk of non- renewal of import and exports licenses can affect the consumer and supplier, this is because if a license is not renewed jobs will be lost and consumers will be dissapointed as their good or service is no longer being offered to them. The risk of war is also dangerous as it can leave the country in harm and have a huge impact as businesses will no longer want to provide their goods and services to the country at war. If war is declared between to countries this impacts the economy greatly.
Through diversifying cultrally and socially a nation becomes more open and desirable to tourists. It allows for major growth and change as well as initiating connection with other countries. Therefore, if more tourists are willing to come to a country it further increases economic growth. International trade may also impact the way individuals behave towards each other, as new customs from overseas are learned and adapted.
According to the Australian Department of Foreign Affairs and Trade, the growth in exporting and companies becoming global has created over 250,000 new jobs. Conclusively, international trade in goods, services and finance has been increasing at an exponential rate which is giving consumers a wider choice of products and services to choose from. Globalisation has not only changed the way we live it has improved efficiency in flow trade and finance, modernised technology for consumers and increased wealth. The process of globalisation, assisted by the technological revolution in communications and computers, is radically altering the shape of world markets, as well as the nature of business and everyday life.