International Trade Essay Example | Topics and Well Written Essays - 1000 words

International Trade - Essay Example Countries will therefore strive to maximize their output through efficiency and optimum resource allocation. Specialization is an aspect of production whereby a country concentrate in the production of products that it can produce efficiently using the available resources. Specialization create a difference in the availability of commodities in different countries and hence the need for trade. The case of surplus of a commodity resulting from specialization applies perfectly to Rodamia due to its mode of production. Rodamia is a vast country that specializes in production of agricultural products. Its neighbors Suntize, Uthania, and Alfanzia are slightly smaller in size and production capacity. This paper will therefore present a report on the state of Radamia’s international. The report will be aimed at making recommendations to the country’s president. International trade has advantages as well as limitations to the concerned countries. In most cases the benefits of i nternational trade overweighs the limitations and hence its continuity. This implies that Rodamia will benefit from the advantages of international trade and at the same time suffers from the effects of the trade due to its limitations. Rodamia is a large country with many resources that include land, labor and capital these resources enable the country to produce goods and services for its growing population. In the process of meeting, the requirements of its people the country experience some aspects of overproduction resulting from specialization and availability of resources. International trade will therefore create a market for excess produce of the country. The country’s economy depends mainly on agriculture and therefore the sector is of great interest to the country. Through international trade, the country will be able to realize specialization. International trade will enable the country to concentrate in the production of agricultural products. This will enable th e country to realize the benefits of specialization, large-scale production, and economies of scale. Large-scale production to meet the domestic and international market demand will increase the country’s per capita income resulting into improved standards of living (Tucker 78). The country has a chance to realize more benefits once fully engaged in the trade and I therefore recommend international trade to the country. The availability of benefits or advantages from international trade implies that the trade has some limitations. Limitations of international trade are difficulties or barriers that prevent free trade. Most countries have tried as much as possible to create free international trade. However, it is impossible to eliminate the difficulties. This implies that Rodamia should be prepared with appropriate strategies to tackle these limitations. To devise effective strategies required to tackle the limitation Rodamia’s president needs to be aware of some of th e difficulties that his country might face from foreign trade. International trade is a long-distance form of trade and hence it is difficult to establish and maintain a close relationship between traders and their customers. This issue will create a difficult environment for international trade through the extra cost required to maintain the long distance relationship. Secondly, cultural differences between the countries involved in international trade will contribute to the difficulties experienced in the trade. Cultural differences will make people of a certain country to be selective in terms of their consumption and this might interfere with free trade. The country also needs to be aware of restriction imposed by different countries to control their imports. Knowledge of these limitations