ABSTRACT
International trade is key to globalisation. Trade is the international exchange of goods and services. It is the opposite of autarky, when a country is self-sufficient and produces everything that it consumes. Trade makes sense when it provides benefits as compared to autarky. Consumer surplus, which is the advantage for consumers due to the lower prices of imported goods as compared to domestically produced goods. Dependency theory distinguishes between a central group of countries and a peripheral group of countries. The central group consists of industrialised countries, with high levels of savings, investment, and technological development. The dependency theorists observed that trade between the two country groups benefits the centre more than the periphery. Just as it did for several hundred years during colonialism. The peripheral countries export their natural resources and agricultural products to the centre, while the central countries export their manufactured products and high-tech capital goods to the periphery.
