International trade does not always run smoothly. There are several factors that become barriers to international trade that need to be known.
In terms of understanding, international trade is a buying and selling activity carried out by two countries, or in economics it is known as international trade.
This business transaction involves many parties, ranging from individuals, governments, and companies. The forms of international trade are generally in the form of exports and imports.
Thus, international trade is one way for countries to improve their economy. This is because each country has a dependence on certain commodities obtained from other countries.
However, there are several factors that can become obstacles for international trade to take place. When hampered, it will not only harm the country’s economy, but also the people who work in related sectors.
6 Barriers to International Trade
International trade has occurred in trade activities for a long time. Citing various sources, the following factors can hinder trade.
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International economic and political policies
International economic and political policies are one of the barriers to international trade.
In general, every country must protect its product commodities so that they are not dominated by foreign products or other countries. It is not uncommon for countries to impose import restriction policies or impose import tariffs.
The imposition of import tariffs will indirectly hinder entrepreneurs who do business with imported goods to be sold domestically. Meanwhile, on the other hand, import tariffs benefit domestic small business actors because the price of goods is cheaper than imported goods (political dumping).
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Differences in currency values
Each country has a different currency with a different value. Often the exporting country just wants its products to be paid for in its own currency.
For example, Indonesia exports coconut products and their derivatives to the Netherlands, so Indonesia only wants its products to be paid for in rupiah.
In this case, generally both countries use other foreign currencies commonly used as international payments such as dollars or euros.
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There is a major conflict in a country
In this case, conflict refers to domestic political situations such as ethnic riots, wars, coups, and so on. Unsecured security risks affect the buying and selling transaction process.
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Long-winded bureaucracy
Every export and import activity must go through the government bureaucracy.
The more complicated the bureaucratic system, the longer it will take to carry out export and import activities. As an impact, the confidence of sellers and buyers will decrease to the point of hampering trading activities.
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The low quality of human resources
Education level affects the quality of production.
If a country is rich in natural products but does not have adequate human resources to process them, the resulting product will also be of low value. This will certainly have an impact on the selling value so that it is difficult to compete with similar products produced by other countries.
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Economic organizations in certain regions
Other international trade barriers are caused by special or limited trade for member countries of the organization.
That way, foreign countries that have good product quality cannot sell their products to these member countries, and vice versa.
Those are some of the barriers to international trade. Each factor certainly has advantages and disadvantages of each.
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