Internal Trade and External Trade

Introduction

Internal Trade and External Trade both are common terms in the corporate world. But what are they? Internal Trade is the trade of a company that takes place within its own country. On the other hand, External Trade is the trade of a company with other countries or countries without its own country. Internal Trade and External Trade both have their own benefits, but also some disadvantages. One good thing about them is that they do not affect most companies morally, as long as they do follow certain rules and terms that are set by their government. For example, In order to import from China, you would need to follow certain customs on how to import from China.

What is Internal Trade?

This refers to the trade of a company that takes place within its own country. Internal Trade is the trade of a company that takes place within its own country.

For example, if a shoe manufacturer buys shoes from other countries, it would then be classified as internal trade. It does not occur between companies from different countries. This refers to the trade that occurs between companies from different countries or companies from the same country with other countries or countries without its own country.

Benefits of Internal Trade:

As mentioned above, Internal Trade does not affect most companies morally. As long as the company follows certain rules, it will not be charged with a crime. Companies can have more flexibility in doing business with other companies from different countries. It is also good for the environment since the shoe manufacturer can buy shoes from other countries while still maintaining production in its own country and saving on shipping costs

Minuses of Internal Trade:

One disadvantage of internal trade is that sometimes companies do not follow the rules set by their government. This could be detrimental to a government’s interests and could cause an increase to taxes or tariffs passed on to other sellers. One example of this would be with China and OPEC.

What is External Trade?

This refers to the trade of a company where one company sells its products to another company. This refers to the trade of a company that takes place between companies from different countries or companies from the same country with other countries or countries without its own country.

Benefits of External Trade:

 Companies can expand their businesses by buying products from other countries. It is also beneficial for developing countries since they can get more capital and resources by doing business with other places around the world, as well as other markets that they would normally not have been able to reach on their own. Another benefit is that companies do not have to do any customs procedures when importing from outside their country since it is considered an external trade; however, there are some exceptions to this.

Minuses of External Trade:

Companies are at risk of being charged with a crime due to some customs procedures that they do not follow. If the company does not follow certain policies, it can cause negative effects on the economy, undermining the government’s interests.

Differences between Internal and External Trade:

1) Internal Trade is the trade of a company that takes place within its own country. On the other hand, External Trade is the trade of a company with other countries

2) Internal Trade doesn’t affect most companies morally and the government can pass taxes and tariffs on to other sellers. On the other hand, External Trade does affect most companies morally and there are no customs procedures for importing from outside a country’s borders

3) One good thing about Internal Trade is that it doesn’t charge companies with crimes if they follow certain terms set by the government. However, External Trade does charge companies with crimes if they do not follow customs procedures or other terms set by the government.

4) Internal Trade can save companies money in shipping costs. On the other hand, External Trade increases companies shipping costs by purchasing from outside a country’s borders.

Conclusion:

Even though Internal Trade and External Trade both have their own advantages and disadvantages, there are still more advantages that outweigh the disadvantages. Overall, it is up to the company whether they want to do internal trade or external trade. They can do either depending on which one suits them more.