MONEY MATTERS

International trade is very beneficial in many ways. Countries differ with regard to geographical position, climatic conditions, mineral wealth etc., and consequently each country is more fitted than others to produce certain goods. For example Middle East countries have plenty of oil resources, Britain has iron ores in plenty and good quality of coal. India and Sri Lanka have tea, and South East countries have tin and rubber. Countries which have a special advantage in anything, specialise in the production of that article and exchange it for another article for which another country is eminently suited. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it from them with some part of the produce of our own industry employed in a way in which we have some advantage.
By pushing forward specialisation and extending the scope of division of labour, international trade lowers the prices of goods and services all over the world. It stimulates their consumption and demand which cause further specialisation and technological progress a reality. In international trade, especially free trade, there is maximum scope of optimum utilisation and allocation of world’s scarce resources. A country can sell her products in those markets where she can get the best prices for her products and buy essential raw materials and other consumer goods from the cheapest sources of supply.

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