International trade growth is influenced by political, economic, and practical factors. Legal regulations, economic policies, and communication technology can affect a nation’s ability to engage in global trade. Political stability and economic conditions also play a significant role.
A wide range of political, economic and practical factors can influence the growth of international trade. Many nations have a variety of legal regulations that businesses must comply with before engaging in international trade, and some nations even have economic policies that strongly discourage it in favor of a more internally focused economy. Practical concerns include the availability of resources and the ability to produce globally desirable products or materials. Communication is also important, as technology such as the Internet now allows for near-instantaneous communication across the globe, thus enabling businesses to market their products and services globally with relative ease.
Political policies and other government concerns, such as relations between trading nations, are extremely important to the growth of international trade. A politically stable nation with few policies that restrict international trade will likely be able to rapidly expand its world trade. Political instability, however, particularly when it leads to violence, can be a major obstacle to trade growth: for these reasons many nations apply high tariffs on exports or imports from certain nations or industries. While such tariffs can be used to protect infant industries or to put political pressure on certain nations, their overall effect on international trade is often negative.
The economic condition and economic policies of a particular nation are also important factors influencing the growth of international trade. It can be difficult for a company in a country suffering from a recession or depression to enter international trade. An economically sound nation, on the other hand, provides an excellent basis for entry into international markets. Under such conditions, it is generally easier for businesses to obtain loans and attract investors, greatly increasing their ability to expand into global trade. The growth of this trade, therefore, largely depends on the economic conditions of the nations engaged in trade on a global scale.
Fast global communication by telephone and via the Internet is also an important factor for international trade. For example, face-to-face meetings can be held from different parts of the ocean with video conferencing technology. This communication technology promotes the growth of global trade by providing businesses with an easy way to market their goods and by establishing a fast method of communication between trading partners around the world. In many cases, for example, you can order goods or services from another country by simply filling out a form on a website.
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