Three major factors have affected the trend in the marketing and trade industry over the years due to the
changes in business environment. These changes are mainly caused by the development of information
technology, globalization and power concentration (Albercht & Sack, 2000, p.6). The advancement in
information technology has paved way to a faster and efficient world for international trade. Investors can
communicate easily with just a click of a button and an investor can now process their business transactions
online. They may also monitor the stock exchange, foreign exchanges, import and export through their mobile
phones or through different accessible financial websites.
Due to the effect of information technology in the nature of international trade, many companies are interested
in outsourcing their businesses as well. Larson (1996) states that,
“Today, technological innovation is required to satisfy customers’ demands for lower prices, faster delivery,
and higher quality products and services. These demands, coupled with a globally competitive environment,
place a great deal of pressure on the profit margins of manufacturers, service providers, and export trading
companies alike”. To survive in this environment, businesses must effectively use technology to ensure that they
can tap into the right information and act on it quickly”.
It has been established that information technology is essential in doing business transactions internationally,
most especially in trading goods and services. Therefore, countries participating in international trade also
develop their system and technology to cope up with the environment. An example are financial websites such as
Bloomberg that provide the most updated news, data, trade information and it can be viewed by people all over
the well. According to the website of Bloomberg (2011), “bringing transparency to capital markets through
access to information could increase capital flows, produce economic growth and jobs, and significantly reduce
the cost of doing business.” With this, investors all over the world participate in international trade online and
can easily access vital information necessary in trade.

The state of international trade has a great impact on the economy of developing countries most especially for
those who basically rely on international trade to increase their GDP. The rapid growth of industrialization
together with the formation of numerous multinational corporations has lead to changes in the trade industry.
Grossman and Rogoff (2007) explain that “governments set trade taxes simultaneously to maximize their
individual objective functions.” In this statement the international trade agreement between countries is given
attention as it brings advantages and disadvantages.
Moreover, other developing countries on the other hand have a different regime that according to Grossman
and Rogoff (2007) “governments set trade taxes jointly to maximize a weighted sum of their objective functions.”
The international trade agreements may vary among each developing country and modern production techniques
have also affected the industry.
Since the industry have risen in half of the 20th century, many countries are now engaging in international
trade. It has been established that in engaging in international trade, the country would be able to benefit in terms
of GDP however, another factor is the highly advanced transportation systems wherein developing countries
need to cope with others (Shah, 2011).
In their participation to this form of trade, they will have to improve their system individually. Also, the
growing transnational corporations may affect the system as it is rapidly evolving together with outsourcing of
different products and services as well as a very rapid industrialization (Aswathappa, 2006).

The benefits of international trade can be depicted on the countries that have developed their income and those
who have obtained trade power over the years. According to Stanley (2011) “nations with strong international
trade have become prosperous and have the power to control the world economy. The global trade can become
one of the major contributors to the reduction of poverty”. This form of trade has flourished over the years due to
the fact that countless of benefits can be derived from importing and exporting of goods to other countries most
especially in terms of demand and supply and the efficiency of that it offers (Carr and Indira, 2010).
According to Hata (2008) “a country would consider trading internationally in an effort to give their GDP a
big boost very quickly.” This is true as some countries have better quality of products and they intend to market it
to other countries for exposure and the transaction would be able to generate income (ITA, 2011). This will also
be the case in return if a country intends to import goods from other countries that have the products and services
they need.
Also, some products can only be found in a certain country such as agricultural products wherein each country
has dissimilar weather thus the production of goods may vary in every country. Some agricultural products may
be hard to produce in tropical countries while other countries on the other hand have an overflow of supply for
that particular agricultural product. Stanley (2011) also listed the following benefits of international trade:
 Enhances the domestic competitiveness
 Takes advantage of international trade technology
 Increase sales and profits
 Extend sales potential of the existing products
 Maintain cost competitiveness in your domestic market
 Enhance potential for expansion of business
 Gains a global market share
 Reduce dependence on existing markets
 Stabilize seasonal market fluctuations
Among others, engaging in the international trade lead to the exceptional performance of a company to cope
up with existing products and service all over the world. Once a country initiates international trade, the import
and export of goods is maintained and enhanced to impress other countries or regions for customer satisfaction
purposes.

Following the boost of industrialization and international trade suddenly the hindrance to the trade industry
approached the world. The global crisis has greatly affected the market in the economy became at a loss affecting
the whole world. Shah (2010) mentions that, “the extent of this problem has been so severe that some of the
world’s largest financial institutions have collapsed”.
Also, it is at that time when some companies have financial issues that resorted to bankruptcy and eventually
closed their businesses. The trade industry went down because the top players in the industry have suffered as
well.

This agreement gave rise different controversies and misunderstandings because of the wide range of its
coverage compared to the GATT agreement that focuses only on the reduction of tariffs among manufactured
goods. It has been argued if the Uruguay round would be more effective or the GATT agreement. Most of the
businesses all over the world are encountering problems with the rules of these agreements.
Anderson and Cavanagh (1997) explains that the Uruguay round “is slated to result in average tariff
reductions of 38 percent for developed economies, reducing average tariffs worldwide from 6.3 percent to 3.9
percent. In comparison, average tariff rates just after World War II were 40 percent. The most controversial
outcome of the Uruguay Round was the establishment of much stronger enforcement mechanisms in the WTO”.
Their policy is deemed to be unfair because it only favors the powerful countries controlling the trade industry
while developing countries need to cope up with them.

The powerful players in the trade industry has been expected to depreciate due to the global crisis and
recession but surprisingly in 2008 there an appreciation in the US dollar occurred rather than depreciation. Then,
it has been established that “the adjustment process has taken a very different path with a collapse in asset prices
and a massive deleveraging process among financial institutions being at the core of the crisis”. Since the
United States is one of the powerful players and controls the international trade industry predictions have been
made that after the recession in the near 2012 the global exchange rate would depreciate.

This is because explains that “there was a fairly widespread expectation that a US dollar depreciation would
play an important if not central role in the global adjustment process”. The decline of US dollar would have a
great impact to other countries involved with international trade for the competitiveness and a sustainable
investment. Factors that are affecting international trade include pattern of global capital flows from US to
elevate cash for redemptions and the foreign investors have changed their equities into a more stable income
with countries like the United States. It is shown in the Figure 1 that all countries have been affected by the
global financial crisis in 2009.

Also, developing countries believe they get a raw deal when it comes to international trade. They have certain
problems which are first of all is “relying on only one or two primary goods as their main exports” (Cohen,
1997). Once the demand or the supply of this goods and services they would have no other option or a
contingency source of products. Not only that, they would also need to consider the following factors such as
that “they would not be able to control the price they get for these goods, price they pay for manufactured goods
increases all the time, as the value of their exports changes so much long term planning is impossible and the
increasing the amount of the primary good they produce would cause the world price to fall” (Feenstra, 2004).
Another problem arises when it comes to rights. The exchange of goods and services can easily be infringed or
copied. A financial website Export.Gov (2011) suggests that, while trade barriers and unfair practices take many
forms, the most common examples are listed below: Intellectual property infringement – including copyright,
patent and trademarks; lack of competitive bidding for foreign government tenders; competition from unfairly
traded imports; unfair and trade distortive subsidies provided by foreign governments to overseas competitors;
foreign trade remedy investigations conducted inconsistent with international obligations; burdensome
certification and testing requirements that are not required by domestic manufacturers and increasing imports
and unfair competition (Streatfield and Lacey, 2008).
Together with the advancement in information technology come the problems along with it as well. Weeks
(2006) explains that “the role of communication networks in economic activity has become more and more
important”. Business firms need to cope with other competing companies with the advancement and
development of their communication technologies for international trade transactions. As a consequence of these
changes, economic analysis of networks has proven that the relationship between trade and communication
networks is highly significant. The barriers arise when the “communications costs which are largely fixed in
nature, unlike specific transport costs” (Harrigan, 2004). Since the process of trading internationally deals with
making transactions globally the communications cost is higher compared to local networks for international
trade uses a worldwide common network services.