What is the difference between international trade and inter regional trade?

Answer 1

Different Currencies: Each country has a

different currency. Buying and selling between

nations give rise to complications absent in internal

trade. This hampers smooth flow of trade as

between one country and Another Country. A large

number of foreign exchange problems arise in

number of foreign trade which are non-existent in

inter-regional trade.

Different National Policies: Different needs lead

countries to pursue divergent national policies and

not only with respect to foreign exchange rates.

National Policies differ in a wide matter of

domestic matters affecting international economic

relations, wages, prices, competition, investment,

business regulation etc and often involve

interference directly in international economic

intercourse in tarrifs, exchange controls, non-tarrif

barriers and the like.

Different Political Circumstances: Mostly

countries differ in political circumstances. In interregional

trade, trade takes place among same

people. But international trade takes place among

people of different cultures, habits and languages.

These cultural distinctions between markets,

important in the absence of different national

measures have led political scientists to take look

at the nature of countries.

Difference in National Resources: Different

countries are endowed with different type of

Natural Resources. They tend to specialise, in the

production of those commodities in which they are

richly endowed and trade them with others where

such resources are scare.

Geographical and climatic differences: Every

country cannot produce and commodities due to

geographical and climatic conditions, except at

possibly prohibitive costs. Countries having

climatic and geographical advantage specialise in

the production of particular commodities and trade

them with others.

Different Markets: International markets are

different in various aspects. Even the system of

weights and measures and pattern and styles in

machinery and equipment differ from country to

country. Goods which are traded within regions

may not sold in other countries. This is why in

great many cases products to be sold in foreign

countries are especially designed to confirm to the

national characteristics of that country.

Problem of Balance of Payments: The problem

of balance of payments is perpetual in

international trade while regions with in a country

have no such problem.