Student’s First Name: Junghwa

Student’s Family Name: LIM

International trade theories (Germany, Mexico and Maize/Corn)

1. Introduction

Why country trade

Why countries trade that reason are next four.

First, different natural environment between countries

Some countries have rich seafood because the countries have sea, but some other countries have not, some countries are hot weather, so rich farm produces and so on. All countries are different natural environment, therefore, they make different producers. Accordingly, each country is trade that they give rich produces and they take produces that they cannot take their place.

Second, different resources between countries

Saudi Arabia has rich oil resources, so the country makes money to trade with other countries for oil producers and then the country take other products for trade from other countries.

Third, different skill between countries (Technical difference)

We want good and service and we are looking for, which country made before we buy, that means we want producers of higher quality. Nowadays, many countries make same producers, but it is differentiated technical. So people can take producers of higher quality of trade.

Fourth, more make money

A country market is small, means that if a country is not trade to another country, the country have limited to make money, but the country makes more money from trade for other countries because other countries trade market is bigger than the country market.

We can take easily producers of made in China because many companies are moving to China that it is in China cheaper labor costs. So that is also treading on one that tread in china cheaper labor cost and high technical skill of other countries, they make good and service to customers.

Home

(Economies Online, n.d.)

Chain can make profit for labors and other countries can make profit for tread on the other hand, having a high technical skill country makes more profit than having cheaper labor.

For example, iPhone Company has high technical skill, but products are in china because in china cheaper labor costs than in America, if the products are made in America the company cannot make high profit because labor is expensive in America.