Foreign trade benefits countries in many ways. In the first place, benefits are derived from a better use of resources because each country can specialize in the goods it more efficiently produces or for which it is better endowed. Peru opened to trade with the world in the 1990s, and has built an open trade State policy that permits to best use our natural resources while strengthening the manufacturing industry and the production of other goods and services that can be competitively sold abroad.
In addition, countries benefit from increased competition because open trade narrows the gap between goods’ production costs and selling price, allowing consumers to purchase cheaper products
Thanks to open trade, consumers also benefit from a wider variety of available goods and services. In addition, commerce incentivizes innovation and technology transfer, because as markets grow, so does foreign competition, driving companies to invest in research and development, and to share innovations. This is particularly beneficial for developing countries because it not only opens access to foreign technology but also encourages creating indigenous technologies. Additionally, a strong argument can be made for the links between trade and development. We are aware that to meet their basic needs and ensure their rights as citizens, people need to earn an appropriate income.
Free trade can contribute to this objective through the better use of a country’s resources, thus opening the possibility of increasing incomes for citizens to meet their needs, assure their rights and thereby develop. This is possible because free trade when coupled with inclusion policies has a positive impact on economic growth, job creation and poverty reduction. In Peru, we have witnessed how free trade is directly rising levels of income and creating a stable, steadily growing economy, which allows to continue improving the quality of living of all Peruvians.