Break The Barriers

                                                                                         

International trading is the exchange of goods and services across international borders. It is the concept of simple exchange of services and goods. These are those exchanges that s simply take place between two parties in two different countries. If a trade takes place between two parties then it is called as bilateral trade and if a trade takes place between more than two parties then it is considered as multi lateral trade.

International trade includes two types of importers. The required goods are directly imported by some importers and some of the importers appoint someone else to handle the issues regarding purchase of goods. You need to be in touch with the foreign supplier of goods in direct trading. In this type of trading there is more profitability but the problems which you will have to face is language, extra costs and exchange rate fluctuations.

Some of the barriers of international trading are:

1. Tariff Barriers: This is the barrier implied on imports in the form of taxes, quotas and duties. Due to which the prices of the imported goods are high and demand for them becomes low. Due to these barriers the importers do not import much of goods.

2. Non - Tariff Barriers: This is the legal aspect in which the country puts the barriers on the imports by restricting import quantity. The supply of foreign products become high and the price level of imported goods become high by defining a fixed quantity.

3. Voluntary Constraints: This is the last type of barrier in which the importing country, gently gives warning to the exporting country to reduce the exports. The country gets the power to avoid the imports coming regularly into the importing country. It also helps in limiting the competition and rivalry between the foreign products and local industries.

These are the three important types of barriers which should be considered while trading internationally. Many of the under developed countries and developing countries use these barriers to avoid competition and for their successful international trading. Some of the advantages of these barriers are:

• by putting tariff and non-tariff barriers the country can earn good foreign exchange.

• The local companies of the importing country are protected against the competition from the multi national companies.

• Consumers will have to buy the local products if the goods are less imported.

• the government gains advantage in the form of revenue as the currency remains in the country itself.

About the author:
Simon Slade is the founder of SaleHoo, an international e-commerce company based in New Zealand. Simon enjoys researching new business trends.

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