Definition of Trade
Trade is defined by Wikipedia as an exchange of goods or services between two or more parties. Trade can be bilateral (i.e. when trading takes place between two people) or multilateral (i.e. when good or services are traded among several parties).
The Market - A place where traders meet. In old times, trade has provided man with its most significant meeting place, the market.
Trading is not a new concept that is peculiar to modern people. Our fore parents and those before them engaged in trade, by exchanging goods and services that they deemed valuable for exchange (or rather that they were in need of at the time the trade took place). Trading has however, been modernized to involve a more common medium of exchange (i.e. is legal tender – more commonly known as money). As a result barter has not been practiced as one of the more common methods of trading resources.
Trade led to the creation of man's most desired asset - Money as a medium of exchange.
There are several types of trade that has been in existence for hundreds of years. There is trade in staples, luxuries, arms trade, retailer, wholesaling, stock exchange, fair trade, slave trade, international trade and commodities. However, for the purpose of this site a definition will be given of international trade.
International trade has occurred as a result of the increased need for people to engage in trading a system has been developed to exchange these goods and services across national borders. Importing and exporting has thus become the mode of buying and selling between nations. This is so because “its economic, social, and political importance have increased in recent centuries, mainly because of Industrialization, advanced transportation, globalization, multinational corporations, and outsourcing,” (Wikipedia).
Free trade is the practice which is preferred on the international level. This does not refer to the exchange of goods without payment, but the erasure or decrease in restrictions such as; tariffs, quotas, or foreign exchange controls between or among countries.
Later, this inevitable effect of globalisation, that we call trade, will be unearthed and its benefits and disadvantages revealed.