International trade is the extensive exchange of the goods, services, and financial capitals across the border of one country. This process is considered to be the key factor, which drives the global economy. Trillions of dollars circulate in this sphere annually, making the cash flows tremendous. However, it may seem surprising that a greater part of cash flow, generated by the international trade, is accounted for the most developed nations – USA, Europe, and Japan. Logically, the question arises – why do these countries, which only present about 20% of the population, generate most of the goods turnover.
There are several reasons to that:
1. These countries started trading internationally much earlier and had a chance to develop the necessary infrastructure, as well fully realize the potential profits, and gain the necessary experience. Europeans are trading for hundreds of years, and certainly are familiar with all the details of the business.
2. The economies of these countries are simply more powerful. The statistic demonstrates us that 5% of the Earth population own over 70% of the global wealth.[1] This way, the richer countries simply have the assets and profits to trade with, while the developing nations have little resources to use for these purposes.
3. Transnational companies are known to generate almost 30% of the international trade volumes, due to their inner-company transactions. 80% of all the powerful TNC-s are based in the developed countries, thus generating the cash flow for national economies.
4. The economies of the developed countries are protected by various trade barriers, preventing less developing economies from participating in the trade equally.
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