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International Trade Assignment

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13 views4 pages

International Trade Assignment

Class assignment

Uploaded by

gad.matayo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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International trade group assignment

GROUP MEMBERS REG NO:

1. Mercyline Jerusa Ong’ayo KM23/12038/17


2. Redempter Mbula Mutinda KM23/12039/17
3. Sambrumo Matayo Gad KM23/12043/17
4. Geoffrey Ngenoh KM23/12036/17
5. John Agbolosoo Atsu KM23/12037/17
6. Brian Vigedi KM23/12160/17

COURSE: MSc Agri-Enterprise Development.

DEPARTMENT: Agricultural Economics and Agribusiness


Management

COURSE UNIT: AGBM 724; International Trade.

ASSIGNMENT: The role of trade in the development of


Agro-Enterprises

PRESENTED TO: Prof. Ngigi

DATE DUE: 25th September 2017


Question: The role of trade in the development of agro enterprises

1) International trade enhances the exploitation of comparative advantage such as use of natural
resources or factors of production in agriculture thus increasing agricultural export. This in
turn leads to increased demand of agro-enterprise commodities hence boosting growth in the
sector.
2) Trade promotes agro-enterprises since consumers benefit from lower prices of within the
marketing arena thus there is prevalence of increased choice and good political relations
amongst the trading nations. Hence increase consumer
3) By using David Ricardo’s theory of absolute advantage, nations develop their agro
enterprises through economies of scale and incurring efficiency benefits from specialization
thus leading to improved profits/ gains and increased corporation tax revenues. International
trade improves competitiveness by helping developing nations minimize input costs and
increase investment as well as value addition to products hence penetration in the global
value chain.
4) Nations involved in trade develop there agro enterprises since there is improved technology
transfer for instance use of ecommerce in agro enterprise. In this regard, secondary industries
have emerged thus abolishing of breaking dualistic structures.
5) Trade boosts Agri-enterprises export commodities such as tea, flowers and coffee when
proper measures such as tariffs are put in place to reduce imports. This helps reduce nation’s
unfavorable balance of payments saving on foreign exchange.
6) Trade helps in creation of employment through Agri-enterprise development. This leads to
improved people’s living standards.
7) Trade through exportation of horticultural commodities increases the gross domestic product
of a nation leading to its economic growth
8) Trade enables export diversification by allowing countries have access to new markets as
well as goods and services. This further opens opportunities for set up of Agri-enterprises
and meet market needs.
9) Trade also expands business opportunities for local Agri enterprise companies by removing
unnecessary barriers and making exportation easier.
10) Trade creates environment for knowledge for exchange hence more innovation in Agri
enterprise development especially in small and microenterprises (SMEs).
11) International trade helps in the reduction of waste perishable commodities through
exportation.
12) International trade fosters rural industrialization through commercialized farming by core
value actors.

References

Corporate Author-European commission, “Ten benefits of trade for developing countries”. URL
eu.europa.eu/trade 23/09/2017

E1 E2/AA’ is Rybczynski line

Stolper Samulson:

Relates changes in commodity prices to changes in real factor prices hence giving vital prediction about
effected of trade of distribution of real income between capital and labour

Rybczynski theorem;
Relates changes in factor endowments to changes in commodity outputs, assuming constant commodity
and factor prices, provides the theoretical basis for Heckscher-Ohlin model.

It helps in understanding the effects of factor growth on evolution of comparative advantage.

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