How International Trade Works


As natural resources are unevenly distributed in different countries, a country cannot produce everything it needs. Some countries are good at producing dairy products, some are specialized in iron and steel industries. As a result, a country will buy what it needs from countries that are good at producing them and in return will sell its products to countries who require them. The products will be moved from one country to another by means of aircraft, railways, trucks, ships or a combination of two or more modes of transport. The buying and selling of goods is international trade and is participated in by different parties: the buyer, the seller, the manufacturer, the shipping company, the insurance company, governments and embassies, customs, various professional bodies, lawyers, agents, shipping registries, chambers of commerce and banks.
See below a video which perfectly describes ‘How International Trade Works (1951):
 
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