Countries trade with each other when, on their own, they do not have the resources, or capacity to satisfy their own needs and wants. By developing and exploiting their domestic scarce resources, countries can produce a surplus, and trade this for the resources they need.

What are the reasons for trade?

The five main reasons international trade takes place are differences in technology, differences in resource endowments, differences in demand, the presence of economies of scale, and the presence of government policies. Each model of trade generally includes just one motivation for trade.

Why would countries join together to promote themselves?

To foster both, political ties between citizens and the state need to reach across ethnic divides. Such ties of alliance connect national governments directly with individual citizens or indirectly through political organizations—voluntary associations, parties, professional groups, etc.