Understanding of International Trade and its Driving Factors and Benefits

in international •  7 years ago  (edited)


Understanding international trade is an activity of buying and selling transactions conducted by two individuals between countries, or an individual with a government or state, or a sale and purchase transactions conducted by a country with another country, International trade includes exporting and importing goods. Activities of transactions conducted can be a sale and purchase transaction services or goods. When compared with domestic trade, international trade is much more complex. Trade is still within the same country is much easier when compared with trade conducted between countries.
pengertian dan tujuan ASEAN

ASEAN is a regional organization of countries in Southeast Asia focusing on economic, socio-cultural and political cooperation among member countries. The organization was formed on 8 August 1967 in Bangkok, the capital of Thailand, in a small meeting between the heads of state and government of five Southeast Asian countries, Indonesia, represented by Adam Malik, Malaysia by Tun Abdul Razak, Singapore by S. Rajaratnam, Thailand by Thanat Khoman, and the Philippines by Narcisco Ramos.

Explanation of the Definition of ASEAN and its Objectives:
The definition of ASEAN and its subsequent objectives include a brief description of ASEAN and its principles. In establishing cooperation, ASEAN countries agree to base their cooperation on the principle of mutual respect for the independence and sovereignty of each member country, non-intervention or avoiding interference with the domestic domain of member countries, and cooperation based on peace and friendship . Initially, ASEAN had five founding countries as members. However, until now ASEAN already has ten member countries consisting of five founding member countries plus Brunei Darussalam, Vietnam, Myanmar, Laos and Cambodia. ASEAN has a secretarial office in Indonesia located at Jalan Sisingamangaraja, South Jakarta.

The purpose of ASEAN is the cooperation of ASEAN member countries. As mentioned earlier, ASEAN has a focus on improving and accelerating the economic growth of its member states, social progress and cultural protection, intensifying cooperation focused on the above areas, and other cooperation in the field of technology and information, development, transnational cooperation, and security.

ASEAN Objectives:

Accelerate economic growth.
Make Southeast Asia prosperous and peaceful.
Enhance active cooperation in all areas.
Charter of the United Nations.
Cooperate more effectively.
Help each other.
Advancing Southeast Asia
In addition to focusing on improving cooperation, ASEAN also focuses on solving problems that occur between ASEAN member countries which also remain based on the principle of non-intervention. In this case, countries outside the conflicting country shall not interfere in the affairs of the conflicting countries. They are only allowed to help up to contexts that are considered non-interventionist and disturb the sovereignty of the countries in conflict.

Also read: History of the New Order

The definition of ASEAN and its subsequent objectives are still related to the cooperation undertaken by ASEAN. Outside ASEAN member countries, ASEAN has also established a number of close economic cooperation with a number of countries outside Southeast Asia. These countries then joined in a forum of cooperation called as ASEAN + 3 which includes Japan, China, and South Korea. Countries located in the East Asia region is considered to have the potential of an economy that can help the economic growth of ASEAN member countries. The cooperation includes automotive, industry, transportation, and other manufacturing industries. In addition to the three countries incorporated in ASEAN + 3, ASEAN also established close cooperation with India which is experiencing rapid increase in economic growth.

Similarly, all matters relating to the Understanding of ASEAN and ASEAN Objectives. With the close cooperation between members, ASEAN is expected to help improve the welfare of each member.

International trade must cross the borders of countries that have different rules. Besides the differences in language, currency, scales and price estimates, different trade laws also make inter-country trade more complicated. The occurrence of international trade is one form of social interaction that is influenced by several factors, one of which is because a country is unable to meet the needs of its own country without the help of other countries, be it the needs of its human resources or natural resources owned. In addition, there are several factors that affect the trade. Here are the factors that encourage the occurrence of trade between these countries.

Factors Driving International Trade:

  1. Development of Science and Technology
    Along with the development of science and information technology and digital, will encourage every country to always improve the quality of human resources and natural resources it has to be able to compete in the international arena. This is what drives international trade by mutual export or import goods from and to other countries.

One example that encourages the occurrence of international trade is with the ability of mastery of different technology areas. Like Indonesia which imports oil from the middle east state when Indonesia is an oil producing country. However, due to the limited ability to process oil that is not owned, Indonesia must export its crude oil and re-import it in the form of ready-to-use fuel.

  1. Economic freedom
    The existence of economic freedom makes an opportunity to increase the wealth of the country. The existence of buy and sell transactions between countries with each other will increase the country's foreign exchange. Economic liberalism or economic freedom encourages all producers to improve the quality of their goods in order to compete in international markets without the existence of restrictive rules. Each country has its own trade rules but with the existence of economic freedom makes interaction between countries will be easier and encourage increased international trade.

  2. Differences in the wealth of natural resources
    The natural conditions of a country with another country obviously have different natural wealth. It is a country to do an interaction with other countries in order to meet all the needs of the country by doing International cooperation in the form of International trade.

A country will be very rare if it has a complete natural resources. Therefore, these countries are not able to meet the needs of their own country. Like the Japanese example to meet the needs of tin to import tin from Indonesia, while Indonesia imports motorcycles from Japan, because Indonesia has not been able to produce its own motorcycle then this is considered more efficient and efficient.

  1. Cost Savings
    International Trade provides a wider market when compared to the domestic market. Foreign trade will encourage production far more and larger when compared to production for the domestic market. By doing more automated production will make the production cost much more efficient. International Trade is one of mutual social interaction with each other. Both countries share the same benefits that help each other's needs.

Benefits of International Trade between Countries:

  1. Advantages of specialization
    Advantages of specialization is meant here is the specificity of a country's production of certain goods. Although one country with another country is able to produce the same goods but will compete to make the goods better and cheaper.
    Automatic other countries will prefer that country to import their goods. For example, the Japanese state that has a specificity in producing motor vehicles so that Indonesia is much more efficient and far more efficient if importing motorcycles from Japan.

  2. Expanding markets and increasing revenue
    With further regional differences compared to domestic trade, it will expand the reach of the trading market. International trade encourages to make the production process optimally so that an entrepreneur will run the machine production maximum. With high levels of productivity, of course, will affect the increased income earned.

  3. Make it easier to meet the needs of life
    Because the natural conditions of each country have different resources, both from geographical conditions, climate, levels of mastery of science and technology and others to make a country can not meet their own needs of life. By conducting international cooperation in the form of international trade will make it easier for a country to get the fulfillment of the necessities of life that are not in production within the country.

  4. Improved technology
    The occurrence of inter-state interaction makes a country encouraged to learn new sciences and technologies in improving the means of production of the country. Increased science will automatically improve the quality of tools easier, more practical and efficient and certainly more pressing production costs. So it will increase revenue from the country.

  5. Increase the country's foreign exchange
    By conducting transactions between countries, of course, will increase foreign exchange income of the country. The entry of trade goods will pay the taxes imposed on each country. The state will gain and increase the value of foreign exchange which would be very beneficial for both countries.

  6. Stabilize prices
    By buying and selling between countries, it will help to reduce the cost of certain products that are considered less stable in the country. For example Indonesia by importing beef is considered able to reduce the price of beef in the country is soaring so high that it can return the price back into a normal price.

  7. Expand job opportunities
    The existence of wider economic transactions will open up a much wider new employment field. International Trade increases the availability of employment for workers in need so that it can reduce unemployment.

  8. Increasing the prosperity of a country
    Trade conducted between countries will greatly affect the income level of a country. With this transaction activity will increase the fulfillment of life needs of a country. It will increase the income of the state and increase the prosperity and prosperity of its people.

Basically humans are social beings who are unable to meet the needs of his own life. Just as a country that is unable to meet the needs of its own country is required to make good cooperation with other countries.
Therefore, a country must maintain good relations with other countries in order to continue the good cooperation in the field of international trade.

GOOD-KARMA

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