How ‘stage of economic development’ and ‘foreign investment’ became the basis of international trade?

Stages of economic development- At different stages of economic development of countries, the nature of items traded changes. In agricultural-based countries, agro products are exchanged for manufactured and finished goods while in industry-based countries, they import raw materials and food grains and export machinery and finished products.

Foreign investment- In economic deficient countries, where the raw materials and cheap labour are sufficiently available, foreign investment can boost the trade of the nation. Foreign investment can help in various types of industries like heavy machinery, lumbering, mining, oil drilling and plantation agriculture. These industries supply finished products which in turn help the economy of the nation as well as import raw materials and food grain, ensuring a very good trade between the other countries.