Advantages and Disadvantages of International Trade??

Re: Advantages and Disadvantages of International Trade??

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Re: Advantages and Disadvantages of International Trade??

The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global trade can become one of the major contributors to the reduction of poverty.

Re: Advantages and Disadvantages of International Trade??

Advantages
* Optimum use of Resources: Foreign trade helps in the optimum use of natural resources and avoid wastage of resources.
* Stable Price: It ensures the presence of stable price by avoiding wide fluctuations in prices. It tries to equalize the world price.
* Availability of all types of goods: It enables a country to import those goods which it cannot produce.
* Increased Standard of living: It ensures more production to meet the demand of the people of different countries.
* Large Scale production: It ensures large production because the production is carried on to meet the demand of its people as well as world market.
Disadvantages
* It could lead to a more rapid depletion of exhaustible natural resources.
* It is a long distance trade and as such it becomes difficult to maintain close relationship between the buyer and the seller.
* Each country has its own language. As foreign trade involves trade between two or more countries, there is diversity of languages. This difference in language creates problem in foreign trade.
* Foreign trade involves preparation of a number of documents which also creates difficulties in the way of foreign trade.
* Some restrictions are imposed on export and import of commodities. These restrictions stands on the progress of foreign trade.
* Foreign trade involves a great deal of risks because trade takes place over a long distance. Though the risks are covered through insurance, it involves extra cost of production becuase insurance cost is added to cost.

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Re: Advantages and Disadvantages of International Trade??

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• Greater variety of goods available for consumption – international trade brings in different varieties of a particular product from different destinations. This gives consumers a wider array of choices which will not only improve their quality of life but as a whole it will help the country grow.

• Efficient allocation and better utilization of resources since countries tend to produce goods in which they have a comparative advantage. When countries produce through comparative advantage, wasteful duplication of resources is prevented. It helps save the environment from harmful gases being leaked into the atmosphere and also provides countries with a better marketing power.

• Promotes efficiency in production as countries will try to adopt better methods of production to keep costs down in order to remain competitive. Countries that can produce a product at the lowest possible cost will be able to gain a larger share in the market. Therefore an incentive to produce efficiently arises. This will help standards of the product to increase and consumers will have a good quality product to consume.

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Re: Advantages and Disadvantages of International Trade??

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Re: Advantages and Disadvantages of International Trade??

The economic benefits that greater openness to international trade bring are:

♦ Faster growth: economies that have in the past been open to foreign direct investments have developed at a much quicker pace than those economies closed to such investment e.g. communist Russia
♦ Cheaper imports: this is down to the simple fact that if we reduce the barriers imposed on imports (e.g. tariffs, quota, etc) then the imports will fall in price
♦ New technologies: by having an open economy we can bring in new technology as it happens rather than trying to develop it internally

Disadvantages of globalisation

The negative drivers of globalisation included culture which is a major hold back of globalisation. An example of how culture can negatively affect globalisation can be seen in the French film industry. The French are very protective of this part of their culture and provide huge grants to help its development. As well as government barriers market barriers and cultural barriers still exist.

Re: Advantages and Disadvantages of International Trade??

The delay of development because of money shifted to cheap labor markets. • Chances of Trade imbalances. • Declining of living standards. • Increase Dependencies on others. • And many more

Re: Advantages and Disadvantages of International Trade??

Hi

Advantages to consider: Enhance your domestic competitiveness Increase sales and profits Gain your global market share Reduce dependence on existing markets Exploit international trade technology Reduce dependence on existing markets Exploit international trade technology Extend sales potential of existing products Stabilize seasonal market fluctuations Enhance potential for expansion of your business Sell excess production capacity Maintain cost competitiveness in your domestic market Disadvantages to keep in mind: You may need to wait for long-term gains Hire staff to launch international trading
Modify your product or packaging Develop new promotional material Incur added administrative costs Dedicate personnel for traveling Wait long for payments Apply for additional financing Deal with special licenses and regulations

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Re: Advantages and Disadvantages of International Trade??

Production output of countries to adopt better practices in order to keep costs down will try to stay competitive as promotes efficiency. Countries that produce the lowest possible price on a product to market will be able to gain a larger share. Therefore an incentive to produce efficiently arises. The increase to consumers to consume a good quality product will help in product standards.

Re: Advantages and Disadvantages of International Trade??

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Re: Advantages and Disadvantages of International Trade??

The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global trade can become one of the major contributors to the reduction of poverty.