The Importance of International Trade and Its Effect for Indonesian Economic Resilience

 Why do we need International Trade ?

As we know the effects of globalization is create the situation that all country in the world is interdependence. so that it giving a new thought to do the International Trade. Actually all countries  have different potential of natural resource so not all countries in the world can produce a goods that they want.

This situation generates idea, how can i have the stuff that i can not produce ?  then finally they form ​an economic cooperation among countries to do the Trade. International Trade is done between developed countries with developing countries , among developed countries , or vice versa. as examples is like Indonesia is able to produce rice but cannot produce Tank , so that they perform the trade with the United States that capable of producing Tank but not rice.

The Idea of doing the International Trade is begins from a thousand years ago, there are several Theories that explain the emergence of International Trade. According of the Adam Smith thought he said that a country has an absolute advantage compared to other countries in producing some goods and services. this theory later named the Theory of Absolute Advantage. whereas according to the theory developed by David Ricardo named the Theory of Comparative Advantage said that country has an absolute advantage is that the country is able to produce goods and services with the cheaper price.

The World Economic is highly developed and become so dynamic because it never separate from increased international trade activity. The International Trade is bring a big impact to others sectors such as encourage of Industrialization, Transportation, Technology and influence the rise of Multinational Corporation. And furthermore International Trade it obviously accelerate the increase of country's economic growth rate like foreign exchange and etc.

Although International Trade can improve the economic performance of a country but it also have the negative effect for the country such as :

1. The Country will be very depend to other countries

2. Bring out the unfair competition in international trade

3. The Society become more Consumptive

4. Economic colonization by developed countries

Indeed strengthening national economic power becomes absolutely necessary if a country wants to enter the international trade market. Indonesia must realize that if we do a lot of import policy that means our structure economic power in the country is very weak, because our homeland product will become very difficult to compete with imported products. One good example is lastyear Indonesia still imports rice from 5 countries. This proves that rice production in the country is so low that if imported rice is often done it will make Indonesia farmers will experience a great problem.

So now Indonesia urgently needed new policies by the government to strengthen the economic stability in the country so that will be able to compete in the international trade market.

By Alvin Ernesto/1701350380

Reference : 

- Fahmi, Irham (2013). EKONOMI POLITIK Teori dan Realita. Bandung : Penerbit Alfabeta.

- http://www.anneahira.com/perdagangan-internasional-21404.htm