Introduction to International Trade International trade is the exchange of capital, goods and services across international borders or territories or in other words it is the process of importing and exporting. International trade has been present throughout much of history and its economic, social and political importance has increased in recent centuries. Industrialization, advanced technology, transportation, globalization, multinational corporations, and outsourcing are all having a major impact on the international trading system. While in most countries, such trade represents a significant share of gross domestic product (GDP). Increasing international trade is critical to the continuation of globalization, because without international trade, nations would be limited to goods and services produced within their own borders. International trade, in principle, is no different from domestic trade since the motivation and behavior of the parties involved in a trade do not fundamentally change whether or not the trade occurs across borders. This type of trade gives rise to a world economy, in which prices, or supply and demand, influence and are influenced by global events. Problem in international tradeI. The Difference Between Domestic and International Trade According to Malcolm (2014) there are several significant differences between domestic and international trade. These differences often involve the imposition of tariffs and other charges, how goods are moved between the buyer and the seller, how the buyer pays for the goods and shipping, and even the type of insurance he or she needs be guaranteed as part of the deal. Knowing these differences can enable buyers and sellers to participate… middle of the paper… international trade still allows for inefficiencies that leave developing nations compromised. What is certain is that the global economy is in a state of constant change, and as it develops, so must all its participants. On top of this, international trade faces a number of obstacles that reduce trade incentives. This is usually done through tariffs, quotas, taxes and other trade restrictions. In contrast, protectionism believes that the regulation of international trade is important to ensure the proper functioning of markets. Proponents of this theory believe that market inefficiencies can hinder the benefits of international trade and aim to drive the market accordingly. Protectionism exists in many different forms, but the most common are tariffs, subsidies and quotas. These strategies attempt to correct any inefficiencies in the international market.