International Trade: It is trade between different countries of the world crossing national boundaries. It includes exchange of goods and services. It is that situation of trade which is free from government restrictions in the form of tariffs, quotas and excise duties etc.
Importance of free and open trade:
Free trade is beneficial for nations of the world. It promotes innovation and creativity in the goods produced by different countries. If trade will be free and open among all the nations of the world it would promote the spirit of completion among the companies of the world and the citizens would get a much better and innovative product for use (Cateora, 2007). It will foster the trade by followings the rules and regulations made by government for free trade and will promote democratic values all around the world. Cost of production of goods and services will be reduced and it will help in the growth of the companies with more returns in the form of revenue that will make companies economically stable. The most important effect of open trade will be that it will improve the standard of living of people all over the world and will also increase employment opportunities (Anderson, 2002). The environment is also protected by free trade as some goods are better produced in countries which are rich in raw material resources from nature, whereas if these goods will be produced by other nations, artificial substitutes will have to be used for the production of final product and that may harm ecological balance and increase environmental pollution.