International trade  significant for Zim

EDITOR — Trade is a very important industry in every part of the world. It is simply the trading of something for something else. This can be one good for another good, one good for money, one good for a service, a service for a good, money for a service, etc. 

Trade can be explained as the exchange of goods between the producers and the consumers. Trade keeps civilisations prospering. People and civilisations need to trade because they cannot produce by themselves everything they need to survive. This is where trade comes in. Trade is essential as it keeps the populations of the world running. 

Trade is important as it is a vital interaction for every country in the world. Without trade, countries would have to provide their own natural and national resources for every aspect in their daily life. Take for instance items such as food, clothing and technology. This would mean that a country is completely self-reliant which is difficult if not impossible as the resource capacity for each country is limited. 

This is a particular issue for developing or highly-less developed countries that cannot fully provide for themselves due to a lack of experience, technology or education. However, even a highly-developed country can struggle if it becomes fully self-reliant.

In international trade, competition occurs at the firm level, while citizens of every country can benefit from free trade. Citizens enjoy a greater variety of goods and services, and generally at a lower cost. Trading is also intrinsic as it contributes a lot to Zimabwe’s economy and it also aids in the creation of employment because as it is the unemployment rate is above 95 percent.

Trade can in turn provide income which can then be wisely used for development within the country such as by funding education and infrastructural development, health sector, among others. Trading also adds to the economy as it provides millions of jobs across the globe.

Imagine a country that decides to isolate itself economically from the rest of the rich world. In order to survive, the citizens of the country need to grow their own food, make their own clothes and build their own houses. However, if the country decides to open its border to trade, its citizens would then specialise in the activities they do best. Specialisation leads to higher productivity, higher income, better living standards and vast economic growth characterised with high employment creation.

The relationship between trade openness and economic growth has been thoroughly analysed, and the findings in most papers support the notion that greater openness to trade generates positive economic growth effects which helps citizens to survive better and combat poverty.