International Procurement

International Procurement in International Trade

Meaning of International Procurement, according to the Dictionary of International Trade (Global Negotiator): The process of allowing firms around the world to bid on contracts for goods and services. The concept has gained popularity as shipping and transportation costs have decreased due to an influx of cheap, readily available fuel. The globalization of large corporations has allowed them to reap the benefits of lower labor and materials costs while still selling the same quality and quantity of products. There are three primary benefits to international procurement: lower costs, stimulation of a global economy, and increased consumer base. In an open economy as more goods and services are purchased from other countries, the wealth of those economies increases. This creates the capacity for increased spending, allowing customers and businesses to purchase goods and services. See also government procurement.