International trade happens because some countries have a comparative advantage in producing goods rather than taving an absolute advantage; which means it is easier for certain countries to produce goods than others.
The reasons for this cornpafative advantage may be because of climate; natural resources such as coal, wood, or minerals; history and development, or the political situation of the world.
Most countries can produce any product, even artificially, if they are williang to invest sufficient capital. Artificial climates are created in greenhousest o grow tropical plants. The UK became a sugar producer at one period, because war prevented supplies getting through.Narway has been an oil producer since oil prices and political pressures forced them to invest the capital for North Sea production' And Japan, with few natural resources has become a major industrial nation by specialising in developing ist technology. But only Russia and America could be really self-sufficient if they had to be, producing their basic needs without importing; so most countries have to export to pay for the imports they need. In doing this, they are concerned with two main problems, their balanco of trade and balance of payments.
The balance of trade between coutries is the difference between the amount of visible goods they import and export. Visible goods are those you can see and touch, for example manufactures, steel, and food produce. An adverse balance of trade means the country is importing too many visibles and not exporting enough, and many underdeveloped countries find themselves in this position, importing expensive technical equipment, which they need to develop their industries, and exporting basic food produce under terms of trade which are a disadvantage to them. In other words if one hundred tons of rice is the cost of one tractor, many underdeveloped countries find themselves paying two hundred tons of fice for the same tractor, as they have no power to control the terms of trade for their produce. Some developed countries also face this problem. In 1981 America warned Japan that unless she reduced her technical exports to the USA, America would prevent Japanese products from coming into the USA.
The balance of payments is the difference between the products (Visibles) and services (invisibles, such as banking, insurance, and shipping) a country imports and exports, and also includes the money produce all it needs in raw materials and food, its visible balance of trade is always adverse. But it has developed invisible exports over the centuries, in lanking, shipping, and insurance services, and these invisibles help reduce its balance of payments deficit, and sometimes even put it in surplus. Since the late 1970s oil production has helped further to reduced the UK's balance of payments problems which had been increasing since the1950s. In 1974, for example, the UK's balance of payments deficit was so serious that it needed help from the International Monetary Fund. (Taken from Basic Commercial English by A. Ashley).
Daftar Pustaka : Suyudi, Ichwan dan Sri Widiati. 1995. Bahasa Inggris 2. Jakarta : Gunadarma.