Foreign trade creates an opportunity for producers to reach beyond the domestic markets, i.e., markets of their own countries. Producers can sell their produce not only in markets located within the country but can also compete in markets located in other countries of the world.

For the buyers, import of goods produced in another country is one way of expanding the choice of goods beyond what is domestically produced. This allows consumers access to a wider variety of goods.

With the opening of trade, goods travel from one market to another. The choice of goods in the markets rises, and prices of similar goods in the two markets tend to become equal as trade flows between countries.

Producers in the two countries now closely compete against each other even though they are separated by thousands of miles. Foreign trade thus results in connecting the markets or integration of markets in different countries.

For example, when a country exports cotton garments to another nation, garment producers in the exporting country gain access to foreign buyers, while consumers in the importing country get more choices. The prices of similar garments in both markets tend to equalize, and producers from both countries compete. This leads to integration of the garment markets across both nations.