Page 3: The changing nature of world trade
As well as the movement towards globalisation, there have been massive changes in international markets over recent years. Until recently the world economy did not really exist. The Soviet Union and its East European satellites opted out because of communism. So did China. India closed its doors to international trade on a large scale. The same was true of many other countries. Altogether, more than half the world's population was outside the market economy. Today many of these countries, totalling 3 billion people, are trying to return. They are doing so at different speeds, faced by diverse problems and with differing chances of success.
The potential gains from this process are enormous. Trade and investment have the ability to revitalise the world economy and bring about a new period of growth. Already the Asian-Pacific is the world's most dynamic economic area. The development of Asian economies presents both a threat and a challenge. There are many activities which allow for mass production at low-cost (i.e. the production of computers, televisions, cars and electronics). There are also many benefits to be gained from the expansion of these markets.
Exporters stand to make many gains from the reconstruction of Eastern Europe. As these eastern European countries develop, their people will demand increasing numbers of goods and services as well as 'know-how' from other nations. For instance consumers from these countries will increasingly wish to purchase modern household equipment, construction and building materials and information technology. Another feature of change in world markets has been the development of huge internal markets which today include:
- Single European Market (European Union/European Free Trade Association)
- North American Free Trade Area (NAFTA)
- Association of South East Asian Nations (ASEAN).
Never has international trade been quite so important for the survival of British companies. In this increasingly interdependent world, it has become an economic necessity. No country is self-sufficient and they are therefore dependent upon the imports of products from other countries. By exporting we can help to maintain our standard of living which, in turn, makes importing possible so that consumers have as wide a choice of goods and services as they want.