FACILITATOR OF INTERNATIONAL TRADE

Determinant or facilitators of the international trade

• Natural Endowment:

 It refers to the resources base of a country, available to it as a free gift of nature. Natural endowment also includes the nature and fertility of the soil as well as climatic condition. The difference in nature of the natural resources many countries now decide to integrate in international trade. Example Tanzania they are good with the presence of natural resources like tanzanite while U.S.A don’t have therefore decides to engage in the international trade.

• Technical know how.

With the technological advancement, advanced nations of the world have overcome all constants of natural endowment. Many countries faces the problem of technology example Tanzania has a lot of the natural resources like tanzanite, gold, diamond but the problems becomes the technology to exhaust the natural resources therefore decides to engage in international trade with higher developed countries like the presence of multinational companies like Ashanti Gold Mine and Barrack 

• Cost Difference:

Difference in cost of production is indeed the fundamental basis of international trade. Difference countries specialize in the production of those goods in which they have absolute or comparative cost advantage. However, cost difference is not the sole parameter of competitiveness in e international market. Due to presences of large cost of production the countries decides to specialized in the product that the cost of production is low compares to the other countries. Example South Africa imports maize from Tanzania while Tanzania imports apple from South Africa.

• New Economic Order:

 Globalization of the world market through milt-national corporations and the emergence of new economic order has forced various nations to integrate their economies with the rest of the world, leading to leading degree of specialization and international trade. The nationals are obliged to engage in the international trade due to the new economic orders.

BACHUBIRA ZAITUNI