What are the factors that give rise to international trade?

What are the factors that give rise to international trade?

The factors that give rise to international trade include;

  • Difference in natural endowments, countries may not have all the resources needed in the production process hence giving rise to international trade to get such resources.




  • Differences in skills, this result into production of different qualities of products hence giving rise to international trade to enable a country get better quality products.
  • Production of surplus commodities, some countries produce in excess of what they can consume hence requiring them to export these surplus products in other countries leading to a rise in international trade.
  • Treaties between countries, some countries enter into agreements with others to supply products to such countries. This give rise to international trade amongst such countries.
  • None use of a commodity, some countries produce commodities which they don¬ít actually consume hence requiring such countries to export these products to foreign countries.




  • Differences in technological development, this gives rise to international trade to enable a country acquire modern technology from other countries for development.
  • Natural calamities, this gives rise to international trade in form of relief extended to countries effected by wars,earthquakes,drought,e.t.c
  • Enhancing political ties, the need for a country to strengthen political relations with another may give rise to international trade between these countries.
  • Comparative cost advantage, some countries may find it cheaper to import a particular commodity than producing it locally hence giving rise to international trade.
  • Demand for a particular commodity, a country may not be in position to produce a product which is desired by its population hence giving rise to international trade to enable such a country get this product.




  • Differences in tastes and preferences, some countries prefer to use products which are produced by other countries hence giving rise to international trade in order to get these commodities.

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