International foreign and domestic trade

Question

Explain some of the reasons why international foreign trade is difficult and risky from the perspective of exporter than is domestic trade.

Answer 1

International trade is difficult and risky for a firm as compared to the domestic trade.  In foreign trade, exporter might not be familiar with buyer, and so not know in case the importer is creditworthy.  If merchandise is exported abroad and buyer does not pay, it may become difficult, if not impractical, for exporter to have any legal recourse.  Moreover, political instability makes it risky to ship merchandise abroad to particular parts of world.