In what ways is foreign trade different from domestic trade?
Explanation
(i) Foreign trade involves the exchange of goods and services across international frontiers while internal trade involves the exchange of goods within the borders/boundary of a country.
(ii) In foreign trade, buyers and sellers use different currencies whereas buyers and sellers in home trade use the same type of currency.
(iii). There's possibility of restriction
— tariffs, import duties, export duties, quotas, embargoes
— when goods cross national boundaries while this does not occur in home trade.
(iv) There are differences in systems of weighing and measuring in one country vis-à-vis the other. A country has only one system of such weighing and measuring.
(v) Differences in transport cost due to distance between buyer and seller, documentation requirement, need for insurance all in foreign trade distinguish foreign trade from home trade.
(vi) There are differences in legal systems and culture under international trade but the legal systems are the same in domestic trade.
(vii) Foreign trade requires languages while in domestic trade a common language is used. •