How and Why Cross-Border Trade Supports the Global Community

Many people rally against the damaging effects of globalisation, yet this homogenising process is a by-product of a number of smaller processes, some of which – individually – pose a series of benefits to the global community. One of these individual processes is cross-border trade.
From: Rosie French
November 28th, 2013 | 0 Comments

Many people rally against the damaging effects of globalisation, yet this homogenising process is a by-product of a number of smaller processes, some of which – individually – pose a series of benefits to the global community.  One of these individual processes is cross-border trade, and in this article, we examine how it works and why it should be adopted more by ethical businessmen, and why it benefits all in the global community.

The Nature of Cross-Border Trade

In simple terms, cross-border trade, also known as border trade, is the flow of goods and services across international borders.  These transactions may or may not pass between separate jurisdictional authorities, and within this context, border trade falls within the framework of general global import-export infrastructure. 

More specifically, border trade refers to an increase in trade where crossing borders is not a troublesome; this can be achieved over land, seas or air.  The most common reason a product or service might be imported is that it is significantly cheaper to import it from its exporting territory than it is to produce it locally, perhaps due to tax reasons.  Although this might simply sound like good business practice, there are a large number of benefits outside of larger profits which makes cross-border trading so beneficial to the ethical businessman.

Strengthening Global Bonds

Trade between two nations is an excellent way to strengthen international bonds because it helps to create long-lasting partnerships where before none may have existed.  This can be advantageous for all sorts of reasons, but for one thing, it might allow for easier travel between two nations by making the world that little bit smaller.

It also creates opportunities for many of the world’s poorest, as in some nations, official trade routes are off-limit to the public; therefore border-trades facilitates the majority of economic activity, so if you’re looking to help those most in need, cross-border trade is a good place to start, while also increasing your potential market.

As a final benefit, this sort of trade helps to prevent global falling-outs by strengthening ties between nations which are not normally associated. Through exporting and importing, nations create symbiotic relationships which help the world to be a friendlier place to be.

Instantiating Ethical Cross-Border Trades   

Cross-border trading is not as difficult as it might sound, as all it really requires is for you to have goods or services you need to export, and for a foreign nation to wish to import them.  However, if you want to trade across borders ethically, you’ll need to consider how the rates of currency you will be exchanging effect the other companies involved over in the foreign nations. 

To do this, you could research exchange rates yourself, or you could discuss your options with a foreign exchange expert.  Either way, this is one way to ensure that your trades across borders have a positive effect, and not a negative one.

Hopefully you’re now more informed about why cross-border trade supports the global community, and if you’re looking to initiate a trade ethically, just make sure you do so having checked that your trade effects all those involved positively.