INTERNATIONAL TRADE

BY FARAH WAHIDAH, NURZULAIKHA DAN WAN FARAH IZYANDIYANA

Malaysia has been involved in international trade with other countries since long time ago. International trade is the exchange of goods and services between countries. International trade can give a benefit of specialization to a country; it will allow the country to focus in the industries where they can be most efficient. Malaysia has been actively creating the positive relationship through international trade with several other countries. Malaysia as a member of The Association of Southeast Asian Nations (ASEAN), a lot of agreement has been signed and a lot of policy have been created such as ASEAN Free Trade Area (AFTA) and Free Trade Area (FTA). Countries like Australia, New Zealand, China and Republic of Korea built a relationship and signed on an agreement. Through the agreement, countries will be able to expand a local business to other country, barriers to trade in service will be liberalized and tariff will be progressively reduced from the entry. We discover that the benefits of international trade that can be enjoyed are resources will be efficiently allocated, local business can venture into new market in foreign countries, and international trade will increase competition and reduce monopoly in economy, and also act as a stimulus in economic growth. In conclusion, international trade can increase the economic growth as long the policy created and economic infrastructure are accommodative enough to cope with the social and financial situation changes.