Meaning of foreign trade

What is Foreign Trade:

Foreign trade is one that refers to the set of transactions of a commercial and financial nature, which implies the exchange of goods and services between a particular country with other countries or nations.

Foreign trade involves the sale or export and the purchase or import of products, goods or services, from one country to another.

The objective of foreign trade is to satisfy consumer demand for certain products.

Importation occurs when, to satisfy the internal demand of a country, certain products must be bought abroad, either because they are scarce or do not exist in the country, or because their production is cheaper or of better quality in another country.

See also Import.

Export, on the other hand, occurs when a country manages to produce a certain product with great value or quality, or with a higher profit margin that allows it to sell it to other countries.

See also Export.

Trade between countries is achieved by promoting cooperation agreements where companies and governments of each country get involved to promote trade relations.

Commercial exchanges at the international level, however, are subject to a set of rules, treaties, agreements or conventions between States, in which governments, companies and the respective legislation intervene.

Foreign trade is essential for the vitality of the economy and to meet the demand of the respective markets. In addition, it improves competitiveness, strengthens small and medium industries and promotes production chains, all of which results in well-being and quality of life for citizens.

Likewise, foreign trade is a source of income for foreign currency to the country, which, in turn, means the generation of wealth.

Also, as foreign trade or, sometimes, as foreign trade and customs, it is called a university degree where it is instructed on the set of theories and regulations that govern trade at the international level.

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