OPINION EFFECTIVE TRADE

OPINION

EFFECTIVE TRADE 

If a nation seeks to trade with another nation that sells products and or services that are cheaper than what its own local producers can sell those same products, then such trade is feasible and need not adversely affect the local producers. Some ways in which this can be achieved are as follows.

First, the importing nation may have other nations with which it trades which cannot afford the purchase price of its own products and or services in this specific category but who can afford the prices of the supplying nation in the trade. Therefore the nation can purchase from the supplying nation and resell to the nation which can't afford its own products and or services in that specific category. This can certainly be done at costs which still keep the products and or services affordable.

This can be feasible when the first purchasing nation has more influence and access to the market of the nation which can afford that specific category of product and or service than the supplying nation which may not have the relations to enable direct sales to that nation's market.

Second, the importing nation may have some populations within its own nation who are poor and cannot afford the normal prices of that specific category of products and or services. The nation, instead of paying local suppliers more to have this product and or services cheaper available for such vulnerable populations, can just save that cost and purchase from the supplying nation and make those products and or services available to the vulnerable populations at a cheaper price without having to pay any cost for the lower-priced products.

To ensure that this does not affect the local producers, these products and or services may be available through methods and means that are not ordinarily available to the average resident. For instance, this could be through food vouchers. This could be through government direct feeding and clothing programmes, for instance. This enables the purchasing nation to be able to provide these products and or services to the poor and or vulnerable at a cheaper cost than its own local producers. The local producers are still able to sell to the market and continue to legally prosper.

This sort of intervention certainly would not be for all classes of products and or services, but most likely essential products and or services. 

A third option is that the purchasing nation can request the supplying nation to offer products and or services which complement its own local producers rather than compete with them. For instance this may be a variety of the product and or service that the local producers do not have and cannot access locally. This means that local producers can purchase these products and or services to complement their own locally produced products in order to provide consumers a greater choice when purchasing. The local producers earn additional money from the lower prices for products and services that they do not have but which complement their own products and or services. For instance a particular type or specie of crop.

Written by Abiodun Mohammed Adeyemi Ajijola