International trade theories Essay

Though literary it sounds simple, the truth is that international trade is complex. This is because it involves countries with different trade policies. This makes to have different international trade theories and business strategies that explain how business is done in different places. The international trade is explained by different trade theories. They include absolute advantage, Heckscher-Ohlin theory, theory of comparative advantage and new trade theory. When countries engage in the producing goods and services that are best for them, they end up specializing in these products. When production is high, there will be more consumption of goods both domestically and outside the country. Higher consumption of goods means that there is a large market of goods. Most of the importing countries will prefer to make order from a country with large productions which can supply them with goods sufficient for their market (Watson, p263).