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Advantages and Disadvantages of International Trade

Check out Advantages and Disadvantages of International Trade discussed below. So let us find out some information on advantages and disadvantages to know more about International Trade. It is a trade between nations in the form of imports as well as exports. International trade can be considered one of the important souce of revenue in the developing countries. Trade between countries is the exchage of both services and goods among the countries of the world economy. International trade will also help a country to specialize in production of those products of commodities in which it enjoys production. International trade is the process of buying of sevices and goods from the rest of the world and selling goods and services to the rest of the world.

Some of the Advantages of International Trade are :

  1. International Trade increases sales and profits  and also helps to gain global market share.
  2. Economies of scale : Specialization in specific products or services allows increasing scale of production and thus lowers average cost of production.
  3. International trade enhance technological interflow and achieves higher productivity.
  4. International trade reduces dependence on existing market
  5. It also helps to widen the coice of products and services and it also allows the transfer of Technologies, knowledge and information between trading partners all over the world.
  6. Research and Development carried out in developed countries can benefit developing countries through trade.
  7. Market advantages occurs when one of the country has abundance of resources and/or can easily produce specific types of product more efficiently and in bulk quantity than the competing country.
  8. Inreases in the international trade is useful for the growth of globalization and the global trade can also become one of the major contributor to the reduction of poverty.
  9. International trade increases efficiency, lower prices for the consumers and improves standard of living, 
  10. Greater diversity of services and goods is possible due to international trade.

Some of the Disadvantages of International Trade are:

  1. Sometimes foreign trade may lead to import of harmful goods and services  which may affect the healh of the residents of the country.
  2. Exhaustion of resources and economic dependence
  3. Political dependence and effect on consumption habits affects international trade.
  4. One of the major disadvantage of international trade is mis-utiliztion of available natural resources.
  5. International trade is affected at the times of emergency.
  6. If no restriction on international trade or foreign trade is made then it may ruin the domestic industries.
  7. Cultural identity issues, Social welfare issues and environmental issues are raised due to international trade.
  8. Rise in unemployment and income inequality is observed because of international trade.
  9. Adverse efffects on economy and publicity of undesirable fashions may affect home industry.
  10. International trade exploits human resources and leads to decline in domestic demand which may widen the gap between rich and poor.

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