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On 18 Feb 01, at 11:17, marcingram2@hotmail.com wrote:

Dear Dr. Ecommerce:

What impact will e-commerce have on international trade, will it lead to a convergence of prices and a change in patterns of trade?

Marc

Dear Mark:

E-commerce will change more the way trade is done than the trade itself. E-commerce is already improving communications and transfer of information. In addition, e-commerce will allow smaller producers to market themselves more widely and to find new customers more easily. Importantly, it will be producers and suppliers in developing countries who will most benefit from this. In the past, smaller marketing budgets combined with very high communications costs, made it difficult for smaller companies in developing countries to promote their products. The Internet has changed this and now these companies can cost-effectively promote their products globally via the world wide web.

However, it is important to bear in mind that much international trade is based on relationships. Would you want to buy a million euro worth of electronic parts from a company you've never heard of in a country you only know from your geography classes in school? Big traders are much the same and understandably prefer to deal with other traders they know and trust. And it is this, more than anything else, that will prevent e-commerce from changing trade as much as some people predict.

Good luck,

Dr. Ecommerce