Why study international trade?

Increasing globalisation has blurred geographical and business barriers, giving an enormous boost to international trade. What's more, according to the Global Trade Update published by the United Nations Conference on Trade and Development (UNCTAD), world trade reached $32 trillion in 2022.

In this post, you will learn what international trade is, how international trade differs from foreign trade, and the economic benefits of opening up to foreign markets.

We have also reserved a section to tell you some reasons why you should study international trade through programmes such as, for example, Universidad Europea's International Business Degree, Degree in Economics or Business Management Degree.

What is international trade?

International trade is an economic activity involving the buying, selling or exchanging of goods and services in different currencies and forms of payment between different countries or geographical areas.

Types of international trade

There are several forms or types of international trade. Among them, we would like to highlight:

• International trade in goods: refers to the export and import of physical products or goods between countries.
• International trade in services: this is the provision of services between countries. They can be very varied and include areas such as tourism, information technology, education, transport, telecommunications, etc.
• Foreign direct investment (FDI): this is economic activity in which companies and individuals from one country invest capital in assets located abroad. These may include buying shares in companies, acquiring property, setting up subsidiaries or branches, or investing in projects, among others.
• International e-commerce: refers to the buying and selling of goods and services over the Internet (websites, social networks, digital platforms, etc.) between companies and consumers located in different countries.
• International franchising trade: is a form of business expansion that involves licensing the use of trademarks and/or a business model to franchisees in other countries.

Difference between international trade and foreign trade

These terms are often used synonymously when there are certain features that make the difference between international trade and foreign trade.

On the one hand, there is international trade. It refers to all commercial transactions involving the exchange of goods and services between countries. This term is used to describe trade in a broader, global context.

On the other hand, foreign trade. It refers specifically to a country's trade activities with other countries or foreign trading partners. This concept represents trade from the perspective of a particular country.

The benefits of international trade

The benefits of international trade are many, as well as having a positive impact on the countries and companies involved in this type of economic activity. However, some of the most important of these are:

• International market access: international trade allows companies to access wider global markets, thereby increasing their customer base and sales opportunities.
• Specialisation: countries tend to specialise in the production of goods and services in which they are most efficient in terms of costs and resources.
• Supply-side extension: international trade enables countries to export the goods and services for which they are most efficient, while importing those that are not produced within their borders. This results in a wider range of available products.
• Access to resources and raw materials: countries can obtain resources and raw materials that are not available within their territories; or obtain them cheaper and of higher quality, which helps to reduce production costs and increase net profits.
• Economic growth: international trade offers new opportunities for business expansion and job creation, as well as attracting foreign direct investment.
• Consumer quality of life: by having access to a wide range of products at competitive prices, shoppers can not only improve their choices, but also their purchasing power.
• Innovation and global competition: competition on an international scale drives innovation and development of new products and technologies.
• Lower prices: international competition often leads to lower prices for consumer goods.
• Promoting peace and stability: international trade has the potential to promote peace and stability by creating interdependent economic relationships between countries.
• Increased efficiency and quality of production: Another advantage of international trade is its ability to motivate companies to increase the efficiency and quality of their products in order to maintain or improve their position in the global market.

Why study international business?

Studying international business is an ideal option for those who want to understand how foreign markets work, keep up to date with trade legislation, plan and manage global business processes in any company, and face global challenges.

If you still have doubts about whether or not to take the plunge, below we have compiled some of the reasons why you might be interested in studying international business:

• There are many career opportunities in international trade, as it is a field that covers very diverse areas: import and export trade operations, investment and international project consultancy, global management strategies, market research, etc.
• International trade is a booming sector and, consequently, the current demand for experienced professionals by institutions and companies is constant.
• International business often involves the possibility of travelling and working in different parts of the world.
• Studying international business at Universidad Europea will allow you to keep abreast of the latest changes and technological advances that are contributing to its digital transformation.
• Training in international business at our university gives you the opportunity to get to know industry leaders and create a valuable network of contacts for your professional career.

And remember, in addition to our undergraduate degrees, we have master programmes that will allow you to continue growing professionally in this area, such as the Master of Business Economics, the MBA in Madrid and the MBA in Valencia.  Find out more about all these qualifications and many more on our website.