Advantages of international trade essay

advantages of international trade ppt

When people save, the capital markets lend money to others, who will spend it on consumer goods, or open or expand a business, therefore creating new jobs.

The gains from international trade may be summed up as follows: i International trade encourages the development of the most efficient sources of supply.

Nations with strong international trade have become prosperous and have the power to control the world economy. Friedman, Benefits of International Trade can be reaped further, if there is a considerable decrease in barriers to trade in agriculture and manufactured goods.

Traders used to transport silk, and spices through the Silk Route in the 14th and 15th century.

positive effects of international trade

It also attracts international investors. International trade increases the risk of proprietary information theft.

Advantages of international trade essay

Brands and businesses which assert themselves in foreign trade work can increase their financial performance. By observing a larger range of trends because of their greater level of global market access, brands and businesses can focus on quality, design, and product development improvements so that they can continuously improve and diversify.

Whether it is a financial disaster, like the Great Recession ofor a natural disaster like Hurricane Katrina, a company with an international presence can survive and even maintain profitability without domestic customer support.

Organizations can better protect themselves from risk thanks to international trade because of the amount of diversification that can be achieved.

Limitations of international trade

Comparative advantage According to the principle of comparative advantage, benefits of trade are dependent on the opportunity cost of production. It is usually easier to take a share of an expanding market than to fight for a share of a market that is already mature or declining. Different countries provide their own political risks at varying levels, while domestic politics changes over time and presents an ongoing challenge. The global trade can become one of the major contributors to the reduction of poverty. T he biotechnology industry in Canada is second only to the U. Some countries are richly endowed with land and forest resources, which others happen to have abundant capital resources. Revenue streams have some protection. International trade among different countries is not a new a concept. Canadian farms produce more food than Canadians can eat, Canadian manufacturers make more products than Canadians use, and Canadian service providers can provide service to other countries. Brands and businesses involved with international trade can further reduce their risk by taking advantage of monetary exchange rates.

In the s fast sailing ships called Clippers, with special crew, used to transport tea from China, and spices from Dutch East Indies to different European countries.

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Benefits of International Trade