Question

1.  
   1. Define international trade.      
   2. Explain four benefits that Kenya derives from international trade.     
2.  
   1. State five reasons why common market for Eastern and Southern Africa (COMESA) was formed.   
   2. List two major imports to Kenya from China.   
3. Explain four problems facing trade in Kenya.  

Answer 1

1.  
   1. Is the exchange of goods and services between different countries.
   2.  
      • Kenya earns foreign exchange which enables it to import goods from other countries.
      • Kenya gets a ready market for its surplus goods.
      • Kenya is able to import what it needs from other countries to satisfy its people.
      • Trade encourages specialization which leads to production of high quality goods in some industries in Kenya hence earn high income.
      • Trade has enhanced co-operation between Kenya and the trading partners through interaction.
      • Employment opportunities have been created in the micro functioning service industries that handle imports and exports.
      • Transport and communication network in Kenya has been improved to facilitate the movement of trade goods.
      • Demand for Kenya's exports have led to the expansion of the industries that produce those goods.
2.  
   1.  
      • To promote trade among member state.
      • To establish a larger market for the goods produced in the region.
      • To acquire greater, higher bargaining power with other trading blocks in the niche.
      • To encourage member countries to reduce duties charged on goods entering their countries from COMESA member states.
      • To remove trade barriers among member states.
      • To create regional specialization in order to improve the quality of goods.
      • To create political co-operation among member states
   2.  
      • machinery/electronic appliances.
      • Expatriates
      • Pharmaceuticals.
      • Textiles
      • Soya beans
      • Crude oil
      • Iron ores.
      • Petroleum gas
      • Gold.
3.  
   1. Insecurity in the country discourages investors/traders incur great losses.
   2. The high fuel prices increase production/transport costs leading to increased prices of goods/low demand for goods.
   3. Exports are mainly raw material agricultural products which are lowly priced hence earning little revenue for the country.
   4. Cheap imported goods create unfair competition for some local products leading to reduction in the production of such goods/closure of some industries.