What factors limit international trade?

What factors limit international trade?

The following are some of the factors that limit international trade;

  • Language barrier limits the level of interaction between sellers and buyers.
  • Great need for modification and standardization of goods leads to an increase in their final prices hence affecting their demand in the market.

  • High risks involved e.g. thefty, baddebtors; bad weather e.t.c discourages many traders.
  • High transport costs due to long distance involved discourage many traders hence limiting trade.
  • Lack of knowledge concerning the different exchange currency rates tend to discourage many traders.
  • Too much documentation involved discourages some traders from carrying out this trade.
  • Trade protectionism tends to limit the volume of imports and exports hence limiting free trade.
  • Cultural differences especially where some cultures discourage consumption of certain products tend to limit the size of market.

  • High competition among traders from different countries further limits the size of market.
  • Political instabilities in the country tend to discourage the local and foreign traders.

Unfavorable climatic conditions tend to affect those traders who engage in agricultural products since it limits the quantities of goods supplied in the foreign market


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