How has foreign trade been integrating markets of different countries in the world? Explain with examples.
FOREIGN trade creates an opportunity for the producers to reach beyond the domestic markets.
- Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.
- Similarly for the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced.
- With opening of foreign trade, goods travel from one market to another. Choice of goods in the market rises.
- Prices of similar goods in two markets tend to become equal.
- Producers in the two markets or to say two countries now closely compete against each other even though they are separated by thousands of kilometres.
- These foreign trade connects the markets of different countries.
- For example, if there are a large number of foot-wear brands available in the Indian markets. A consumer who is aware of international trends can choose between a local brand like Bata, Lakhani Phoenix and international brands like Adidas, Nike, Reebok, etc.