UK Should Be Back On Track By 2010 Recovery! Really, Show Me Where?
Sep 12

Trade is as old as world because since the beginning of time people have traded one thing for another. While in Middle and Renaissance ages international trade was considered as trade of natural resources, latter people understood that it is quite wise and profitable to improve a resource or item to increase its value and thus make more money by selling it.

Of course simple trade of natural resources can be very profitable as there are no added costs, just the cost of producing it, but it is only profitable for large countries or corporations with access to an abundance of natural resources. For smaller countries and companies it is actual more profitable to trade items with added value. A simple example – you can trade iron ore which is quite simple to produce and is fairly cheap or you can turn this iron ore into steel. That requires additional time and cost, but the added value significantly increases its value. For countries with few or no natural resources this is the only way to conduct a profitable and sensible trade. So they import fairly cheap raw materials and turn them into items with added value. Generally in long term the trade in value added items is considered more viable. It is also a more efficient usage of raw materials and rare natural resources. Currently many governments encourage their companies to produce and export more value added items. Some governments even offer special beneficial programs for manufacturers of high value added goods.

Well you might say that trade is trade no matter what you trade, but you must remember that sooner or latter we will have used up all natural resources. So a value added goods trade is a better option in the long term. It might be a bit harder to do than simple trade, but in long term the profits will be much higher. But after all what you do is up to you. This is just an opinion.

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