CHAPTER ONE

• Background to the Study

Trade involves the transfer of goods and/or services from one person or entity to another, often in exchange for money. The concept of trade has gained wide recognition due to the existence of specialization and division of labour, in which most people concentrate on a small aspect of production, but use that output in trades for other products (Oyejide, 2006).International trade has flourished over the years due to the many benefits it has offered to different countries all over the world. The advent of globalization has led to increasing demand for international trade. According to Oyejide (2006) international trade is the exchange of services, goods, and capital among various countries and regions, without much hindrance. The international trade accounts for a good part of a country’s gross domestic product. In international trade, the importation and exportation of goods are limited by exchange rate, import quotas and mandates from the customs authorityof various countries participating in global trade (Bah and Amusa, 2013). The importing and exporting jurisdictions of various countries may impose a tariff on the goods and services traded in global market. In addition, the importation and exportation of goods are subject to trade agreements between the importing and exporting jurisdictions of participating countries.

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