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What Are The Disadvantages Of International Trade

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The term ‘trade’ is like a two edged sword.There are many reasons as to why. By trading, it brings in a lot of advantages to the country. International trade brings valuable benefits such as the exploitation of a country’s advantage. It allows trade to encourage a country to specialise in producing goods and products and services in which it can be most efficient and effective and also at the lowest possible cost. Another advantage would be that trade allows the increase in competition and overall lowers the world prices of goods. This in turn gives advantage to buyers by increasing the purchasing power which would then lead to a rise in the consumer surplus. Trade also allows the increase in employment, and given that employment plays a big role in production, it means there will be more employment in the exporting sector thus more jobs will be available across the whole country.

For example,the United States is the world’s largest trading nation currently with over 2.3 trillion worth of goods and services exports in 2013. Also, over 25 of all manufacturing jobs are supported by exports. Without trading, America would not be able to prosper as it is now, trade is essential for them to fuel their economic …show more content…

As such with international trading, the one thing that suffers mainly is the local production within the country. With international competitors trading with the country, these industries are easily overshadowed. Another form of disadvantage would be the economic dependence. For example, underdeveloped countries are hugely dependent on the developed ones for their own economic development. However, this could eventually cause economic exploitation as seen in countries in Africa and Asia being exploited by European countries. In addition for these trades to happen,there must be a stable relationship between two countries. If the major country faces a downfall,so will the countries that are dependant on

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