List and explain five problems associated with international trade.

Five problems associated with international trade

1. Differences in currencies: Each country has its own currency, so payment involves converting one currency into another, which creates exchange-rate difficulties.
2. Language barriers: Traders from different countries speak different languages, which makes negotiation, correspondence and understanding of terms difficult.
3. Trade restrictions: Tariffs, quotas, import licences and embargoes imposed by governments hinder the free flow of goods between countries.
4. Long distance and transport risks: Goods travel over long distances, exposing them to delay, damage, loss and high transport and insurance costs.
5. Differences in weights, measures and laws: Countries use different systems of weights and measures and different commercial laws, causing confusion and disputes.
6. Problems of payment and debt recovery: Distance and different legal systems make it difficult to obtain prompt payment and to recover debts from foreign buyers.