CHAPTER ONE

INTRODUCTION

1.1       BACKGROUND OF THE STUDY 

International trade is the exchange of goods and services between countries including business enterprises and individual domiciled in different countries of the world. The exchange of goods and services through international trade does not only enable a country to produce these goods and services for which if is best suited, based on its natural endowments (e.g. fertile soil, mineral resources, climate) but also allow a country experiencing. Acute domestic, shortage (resulting perhaps from bed harvest, draught e.t.c) to remedy the situation through importation. Thus, it has been said that international trade cannot be gain said.

 Natures of world are not self sufficient. They rely on each other for the supply of what they lack. Thus, natures exchange what they have with what they do not have.

International trade can be bilateral or multilateral. If it is bilateral it means such trade is between two countries only e.g Nigeria exchanges her crude oil with Britain and in return. Britain gives her manufactured goods to Nigeria such as building materials, tires, foods, item etc. when a trade is multilateral; it means such trade involves more than two countries. It can be trade between U.S.A, Nigeria, Switzerland and India. Trade could be tangible or intangible. Tangible goods are physical or visible good and intangible goods are invisible goods, such as shipping, banking, insurance etc.

The country economy today is dominated by oil sector, which accounted for over 90% of Gross Domestic Product (GDP) before the increase in the price of oil in the early seventies, agricultural produce are used to finance the immediate post independence development programmed for this reason, Nigeria has since the attainment of independence been at the vanguard of exportation of goods and services subsequent to the discovery of crude oil. It is noteworthy that little was know by economic Plaines about export promotion, financing and activities were limited to a range of agricultural commodities and these solely financed by the marketing board. In industrial sector, import substitution was the cornerstone of industrialization policy. The policy whose main objective was to offer protection to in faint industrial, replace imported goods and there by conserving foreign exchange.

The economic problem could be traced to the world economic depression. The fall of our export was due to the mono-product nature of external trade. Misplacement of priorities by our leaders and frivolous spending pattern of the civilian administration causes by money illusion we had over the years and this led to unemployment problem low production and services which brought about difficulties in balance of payment with all the problem the country them realized the need to look beyond the oil sector for the purpose of generating more earnings an exports. It is for these reasons that the Nigeria Export Promotion Council (NEPC). Nigeria Export and Import Bank (NEXIM), Nigeria Association of Exports (NAE) were established to improve the differences between the