International trade is the exchange of capital
International trade is the exchange of capital, products and services across borders. Advantages of international trade include greater utilisation of resources, importing products that can not be produced locally, and increasing the variety of choice to consumers. However, international trade may be associated with disadvantages as well such as loss of local jobs and high level of dependency on foreign markets.
Significance of international trade to UK business organisations can be explained by referring to the concept of comparative advantage. According to the concept trade between two countries can be made in a mutually beneficial manner, if each country has comparative advantage to manufacture products to be traded.