International trade is the exchange of capital, goods, and services in the form of exports and imports across international borders or territories. In most countries, such trade represents a significant share of gross domestic product (GDP) and have a major impact on industrialization, advanced transportation, globalization, and multinational corporations. Thus, increasing international trade is crucial to the continuance of globalization.
Nowadays, international trade is not only carried out by developed countries but also by developing countries, including Indonesia. The main objective of international trade is to obtain profits, especially in terms of foreign exchange by exporting goods or services produced in one country to another country. In addition, the state could also be importing goods which are either non-available or are available in insufficient quantities.
As for the Indonesian economy, international trade not only brings positive impacts but also negative impacts.
Though foreign trade has many positive impacts, its disadvantages or negative impacts should not be ignored:
International trade is a system that more complicated than domestic trade because it’s influenced by various things, including taxes, currency exchange rates, and quotas of imported goods. In addition, political conditions in one country also could affect the international trade. From an economic standpoint, international trade could increase the country’s debt when the number of imports exceeds the amount of exports. Thus, to prevent possible losses due to international trade, a country must have a good financial management.