World trade is defined as an agreement between two or more nations that may operate their business in different parts of the world. This business is done by importing and exporting goods and services. In short, buying and selling of products and services irrespective of national boundaries.
Given below are five elements that make international trades possible −
● The agreement over sale of items.
● The agreement over carriage of items.
● The agreement over insurance of the items.
● The consent from the exports and imports authorities to fulfill legal formalities.
● The mode of payment as agreed by the buyer and the seller.
It is not possible for any country to fulfill all its needs by itself. International market is a channel through which nations source the products and services they lack or do not have in sufficient quantities. Apart from this, international politics play a pivotal role in achieving, promoting or maintaining peace between international trading partners or nations.