International trade happens when two nations or people living in two nations get involved in selling or buying of goods and services with each other. It happens because not any country on this planet is sufficient enough to produce all kinds of goods. We learn a lot about trading in schools but since we are living in a globalised world, it is high time to learn about international trade.

There is a need to study international trade because in the last few decades, the exchange between countries has increased a lot. The market is open for everyone and as a result, we have different types of products available. While as a consumer it is a good thing to have so many options to choose from, the theory of international trade deserves to be understood.

Monetary System

First is the independent monetary system. Every nation has its own currency which is used for trading of goods and services but the same currency unit prevails within the borders of the country. For dealing with foreign countries, one has to rely on the exchange rate instead of domestic currency.Foreign exchange rate depends on the value of a currency in the international market. For example, 1 dollar is equal to around 75 rupees and that determines its foreign exchange rate.

Trade Policy

Every country has its own set of rules and policies when it comes to trade. For instance, in some countries, there might be a ban of liquor while in other countries, that could be the most imported item. The culture of the country, the dynamics of finance, the ecosystem, population and national income determines the trade policy of that country.

Socio-Political Conditions

Another reason why international trade deserves our special attention is the fact that it is important to acknowledge the socio political environment of the nations. The international relations between the countries and the power play decide the socio political environment between the nations. Also, within the boundaries of the country, there remain so much issues which need to be considered when we talk about international trade.

Conclusion

One cannot deny the fact that international trade has opened the doors for many traders and buyers to exchange goods across the borders. In future, there is a good chance that international trade will increase because of the increase in the number if buyers. In such conditions, it is only logical to be aware of all the logistics in order to thrive in the ever changing environment of international trading business.