Benefits of Global Trade in Modern Business

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Global Trade

Global trade has been a staple of the world’s economy for as far back as human records show. From Ancient Babylon all the way up to our current Atlantic and Pacific partnerships, it’s a logical means to sharing items that would otherwise be impossible to obtain anywhere else.

Benefits of Global Trade

That being said, countries do not make the process easy by any means. Including misaligned standards, governmental interference and the addition of services as opposed to just goods, it’s no surprise that global trade is far more complex than many would like it to be.

Aligning the Standards

In the US, lead paint is no longer allowed due to its harmful effects on humans. In South Africa, however, these paints are still widely used. While America can trade its paint with South Africa with no upsets, South Africa suffers because their standards aren’t restrictive enough to match America’s requirements. This goes far beyond paint, too. Children’s toys, makeup and even technology products like gadgets are faced with regulations at each country’s port of call that may or may not make the items illegal, resulting in a net loss for those countries that don’t have the same type of safety enforcements in place. In the end, it’s a practice that hurts those smaller countries, limiting just what they can and cannot exchange with the world.

Determining the Customers

When it comes to marketing in a different country, most companies assume that the middle and upper class individuals make up the consumer base. They plan out everything based on these demographics and ship it all with highly specialized parcel tracking software to ensure the correct amount arrives at the right time and in the right destination. What they don’t realize, however, is that governments have the ultimate say in what comes in and what goes out. If there is a surge of nationalism because the internal economy has been dropping, then those exporting to said country can expect to see net losses. That is, of course, if there aren’t contracts undergoing bidding wars.

Defining Services

It used to be that goods were the only measure of things traded. Olive oil could be used to pay for silk. However, in this world where it’s easy to find contractors across the globe in an attempt to keep costs low, services have now become a legitimate means of trade.

Unfortunately, services are far less regulated, and any mismatch in treatment of the workers could result in catastrophe. For instance, one country could restrict who earns a degree, but once the degree is obtained, that person has relative freedom.

Another country can let anyone obtain this degree but then extends tight control over everything these degree-holders do. Bring those from the second country over to the first, and the lack of regulation would quickly cause deteriorated standards.

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