The definition of international trade is an activity of exchanging goods or services based on voluntary will between two or more countries to meet mutual needs through export and import activities.

Usually this activity is carried out in order to meet the needs of each country. The reason is that all countries cannot meet the needs of their own population due to the limited natural resources they have.

International trade is carried out to meet a country's need for goods or services that cannot be produced domestically due to certain factors. International trade activities can be carried out by residents of one country with citizens of another country, individuals from other countries, individuals with the government of another country, or the government of one country with another country.

The following is a review of the meaning of international trade according to experts, its types, benefits and impacts, which have been summarized by Nuraviva.com from various sources

Driving Factors for International Trade

The following are several countries carrying out international trade, namely:

Differences in Natural Resources Owned by Each Country

The natural resources owned by each country are not the same and result in differences in production results from these countries.

• Differences in Human Resources Quality Levels
  The availability of natural resources requires the carrying capacity of human resources.
• Differences between Science and Technology
  Countries that master science and technology will be able to produce more goods and services, of higher quality and more efficiently than countries that do not.
• Cultural Differences of a Nation
  Cultural differences in a country will greatly influence the goods produced.
• Other Differences
  Other differences that influence international trade are differences in prices of goods, differences in wages and production costs, and differences in tastes.

Types of International Trade

Here are several types of international trade that you need to know, namely:

1. Export and Import

Exports and imports are these types of trading activities that are often carried out by all countries. There are two ways of exporting, namely normal exports through applicable regulations and exports without L/C where goods are sent through permission from the trade department.

2. Barter

Bartering or exchanging goods is still often done in several countries. Usually the barter carried out is direct barter, switch barter, counter purchase and bay back barter.

3. Consignment

Sales by sending goods abroad where there are no specific buyers abroad. Sales can be carried out through the free market or trade exchange with auction activities.

4. Border Crossing

It emerged from two neighboring countries with the aim of making it easier for their residents to carry out buying and selling transactions with each other.

Benefits of International Trade

International trade activities have actually been going on for thousands of years BC. As communication and transportation technology develops, trade activities between countries become increasingly smooth. Therefore, currently international trade is an important aspect in the economic growth of every country. Many countries take advantage of international trade to increase Gross Domestic Product (GDP). An increase in GDP value is an indicator of a country's economic growth. The following are the benefits that each country can get from collaborating in international trade, namely:

1. Establishment of friendly relations between countries

Trade between countries is also useful for forming friendly relations with other countries. If relations between countries run well, it is likely that cooperation between the two will develop into many sectors and will not be limited to trade. This cooperation can also penetrate other fields such as culture, politics, education, military and technology.

2. Create efficiency and specialization

The ongoing international trade will make one country specialize in one economic sector. That way, the country and its residents will have special skills that are different from other countries in producing goods and services.

3. Increase the prosperity of the country

Indicators of a country's prosperity can be seen from the activities of economic actors including producers, consumers and the government. With international trade activities, it will bring prosperity to every economic actor. Producers will experience prosperity if they can increase their profits by increasing sales of goods or services to various countries with few tariff or non-tariff barriers. Meanwhile, consumers will experience prosperity if they are able to increase utility by increasing consumption without being hindered by difficulties in obtaining goods or services that are not produced in their country. The government also benefits from international trade because the country's foreign exchange income will increase if the export value is higher.

4. Reduced unemployment

If the foreign trade market expands, the production activities of goods or services in a country will also increase. Therefore, the need for labor is also increasing in various sectors. If that happens, the unemployment rate will automatically decrease.

5. Transfer of science and technology (IPTEK)

International trade also acts as a tool for mobilizing science and technology, especially from developed countries to developing countries. International trade will allow a country to export goods based on technological sophistication such as modern machines and tools to countries that need them more. In this way, the mobilization of technology in the importing country will be faster.

6. Stabilize the price

International trade can also indirectly control prices in a country's domestic market. With international trade, shortages of goods which result in high prices can be overcome through imports to increase stocks in the domestic market. On the other hand, if a country has excess stock which causes the price of goods to become cheap, export activities can be carried out to reduce goods.

Barriers to International Trade

One of the obstacles to international trade is government regulations or rules that limit free trade. The government's aim in implementing this policy is to protect domestic products. The following are some barriers to international trade, namely:

1. Implementation of tariffs and customs duties.
2. Import ban.
3. Import quota.

Negative Impact of International Trade
Although international trade cooperation brings many benefits to the countries involved, this economic activity can also have negative impacts. The following are a number of negative impacts of international trade, namely:

1. Domestic product is decreasing

This international trade will also give rise to industrial competition between countries. If industry in a country has low quality product production and prices are relatively expensive compared to other countries, then that country will experience a decrease in demand. This is because consumers tend to look for goods with good quality and affordable prices.

2. Dependence on developed countries

In terms of goods production, developing and poor countries have quite high dependence on developed countries in production factors, especially those related to technology. Meanwhile, in terms of consumption of goods, the development of electronic and automotive goods is currently increasingly controlled by developed countries. As a result, the majority of poor and developing countries are still consumers only.

3. Small industries have difficulty competing

Limited capital often becomes an obstacle for small industries to develop themselves. International trade activities have the potential to increasingly limit the space for small industries because they have to compete with national and multinational industries that have greater capital.

4. Unfair competition

The steps taken by a country's government to win competition in international trade, by implementing a number of policies such as dumping and import tariff practices, are inappropriate. This strategy destroys the essence of international trade which should be based on the principles of healthy business competition.