International Trade refers to trade in goods and services between countries.
DIFFERENCES BETWEEN HOME TRADE AND FOREIGN TRADE:
- Meaning: Home trade means buying and selling goods within the country, while foreign trade means buying and selling goods between countries.
- Distance: The distance involved in foreign trade is much greater than the distance involved in home trade. This means that air or sea transport has to be arranged in foreign trade, whereas road and rail transport can be used in home trade.
- Trade Barriers: In foreign trade, there are trade barriers like customs duties, quotas and embargoes, levied on imports and some exports. There are no such trade barriers in home trade.
- Types: Home trade includes wholesaling and retailing, whereas foreign trade includes importing, exporting and entrepot trade.
- Languages: In home trade, there would be no difficulty regarding language, as the same language is spoken. But in foreign trade, translators would be required as each country speaks a different language.
- Currencies: In home trade, the problem of exchange rate would not arise, as the same currency is used for payments. But in foreign trade, each country uses a different currency. So the problem of exchange rate would arise.
- Technical Requirements: In home trade, the same technical specifications for goods are required. But in foreign trade, each country has a different technical specification. So manufacturers would have to produce goods according to different technical specifications.