Mention the problems of International Trade.
Or, Discuss the complexities of International Trade.
Trade originated from the interdependence of human beings when the practice of exchange began. So, the development of trade means the development of human civilization. With the advancement of civilization and culture, human needs and aspirations for a better life have increased. At the same time, the volume of trade has increased. Later, with the introduction of modern trade, the scope of import-export trade expanded. As the volume of international trade in the world has increased, so has the complexity or problem. The main problems of this trade are:
1. Complexity of law:
International trade runs between different countries beyond the political boundaries of the country. As a result, the laws of different countries apply to this trade. Both importers and exporters have to be aware of the laws of the two countries.
2. Uncertainty of currency depreciation:
Foreign exchange is traded in international trade. But due to the depreciation of the currency of different countries, there is often uncertainty in this kind of business.
3. Proper preservation of documents:
This type of trade requires different types of documents for shipping goods. Such as – insurance policy, consignment invoice, consignment receipt, etc. All these documents need to be properly preserved. Otherwise, various problems arise during international trade transactions.
4. Controlled by more than one state:
International trade is controlled by more than one state. Resulting in much more complexity. This type of business takes a lot of time from start to finish.
5. Lack of direct identity between buyer and seller:
In international trade, there is usually no direct communication between buyer and seller. One side remains unfamiliar to the other.
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