Home trade plays a vital role in providing the people of that particular country from the basic necessities to the luxuries of life. On the other hand, foreign trade is also necessary for some countries due to several reasons. Firstly if the country does not produce that need or want it can import from the other country and the second reason is the shortage of the produced need or want. A shortage can cause the government of the country will tend to import from the other country. In the end, we all know that things do not happen so simply. Same is the case in both the home and foreign trade. There are some complexities to be faced by the trader.
Different Languages
In home trade, there would be no difficulty in understanding informative literature, technical hand outs, packing instructions, etc, as all traders would know the national language of the country concerned. However, in foreign trade, communication difficulties whether oral or written letter, telegram or trade literature and instruction manuals on goods exported may arise, as the exporters and importers may speak totally different languages. However the use of English in international commercial circles has to a large extent overcome this problem.
Different weights and measures
In home trade, the same units of length, weight, capacity and voltage are used. However, in foreign trade, different countries use different units of weights and measures. For instance in North America, the electric supply is 110-120 volts and the frequency is 60Hz, whilst in Malaysia it is 240 volts and the frequency is 50 Hz. Thus, a Malaysian electronic firm supplying both home and North American markets would have to make transformers, motors of different specification.
Different social standards, rules and regulations
In home trade, producers, wholesalers and retailers are familiar with the taste and effective demands of consumers as regards their goods as well as rules and regulations pertaining to the sale of these goods in the local market. However, in foreign trade exporters are selling to different country where the people may have different social standards, tastes and income levels. Rules and regulations regarding the sale of goods may very well be different. Sometimes, the food and drug regulations in certain countries may prohibit the use of certain food additives and colorings. Thus, there is a greater need for market research before the exporter dares to venture into the export market.
