The volume of international trade has grown consistently in recent years. This growth has been largely due to advances in international transportation and communication networks, as well as advancements in technology which facilitate more efficient international trade. Despite the globalization of markets, which has allowed for increased competition, the volume of international trade has not been adversely affected. In fact, total world merchandise exports have grown at a compound annual growth rate of 4.2 % over the past two decades. The total trade volume has increased from US$880.7 billion to US$23.3 trillion as of 2017.
International trade has also been made easier and cheaper with the introduction of trade agreements between countries. These have reduced some of the trade tariffs, enabling member countries to expand their export market. Free trade agreements have been beneficial to all participating countries; they open new markets and provide access to more varied and cheaper commodities. Additionally, the cost of importing and exporting has been reduced significantly, due to the development of technological infrastructure, such as online banking, electronic payment systems, and the development of transport mechanisms.
The trend of international trade has varied over the past several years, but one constant is that countries with strong trade exports and imports will continue to reap the benefits of sustained economic growth. This is particularly evident in countries such as China and Germany, which are two of the largest exporters in the world by volume. These countries have taken advantage of the lowered tariff barriers, allowing them to continue to increase their export volume. In addition to the financial gains, strong international trade has also led to greater job opportunities, rising income levels, and increased production of goods.
The increased volume of international trade has had a positive impact on global economies. Increased trade has been advantageous for those countries with a comparative advantage, allowing them to export goods or services to countries that don’t have them domestically. The increase in international trade has also opened up new markets for products and services, especially in developing economies. This encourages competition and innovation and ultimately leads to increased economic growth.
The growth in international trade has also had a profound impact on other areas, such as the environment. By increasing global trading, nations are able to reduce their energy consumption and reduce carbon emissions. The development and use of renewable energy sources have also become more prominent and cost effective as a result of international trade.
In conclusion, the growth of international trade has drastically changed the global economy over the past two decades. With the reduction of trade tariffs and the introduction of free trade agreements, countries have been able to sell their goods and services abroad and benefit from increased competitive markets. Furthermore, the growth in international trade has also created positive externalities, such as job opportunities and increased income levels. This can ultimately lead to greater economic growth in many countries.
