Here are the major problems affecting international trade.
1. Balance of Payment Problems: There is always disparity in the price of commodities between the advanced countries and the less developed ones. The prices of manufactured goods from the advanced countries are always high while the less developed countries earn little from their primary products exported to the advanced countries. This makes the balance of payment to be in favour of the advanced countries.
2. Language Barriers: Differences in language between countries sometimes inhibits international trade transactions. For example, language and political differences were, for a long time, partly responsible for the low level of trade between African countries and the countries of Eastern Europe and Russia.
3. Currency Problems: Various countries have different currencies. For example, Nigeria uses Naira, U.S.A uses Dollar, U.K., the Sound Sterling; France, Franc. At times, it is difficult to contest these currencies into the currency of the country where the business transaction is done. International trade is transacted only in terms of convertible (otherwise called "hard") currencies, e.g. American Dollar, British Sterling, Japanese Yen, etc.
4. Immigration Barriers: Some countries need travel documents like visas, green cards, etc. to allow visitors into them. Some countries also have bilateral agreements with other countries, and as such have a quota on the number of visitors to be allowed into their respective countries. This type of situation limits free movement of goods and services among countries.
5. Government Policy: Government may place high tariffs on some goods or high import-export duties on some commodities. Government may also place a total ban on some goods from other countries. Such government policies can place a limit on the free flow of goods, services and labour, thereby affecting international trade.
