Question

In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country, for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent the losses?

Answer 1

Benefits of international trade to a country exceeds the cost………………?

Benefits of international trade:

1. The country can earn the profits when the exports level is high and import level is low.

2. GDP (gross domestic product) is positively influenced by the efficiently and effectively allocation of resources.

3. Exchange of technical ideas as well as flow of expertise are offered by international trade.

4. Foreign researchers and development provides benefits regarding productivity.

5. Companies motivates by global competition.

6. With the help of international trade, consumer can assess the kind and variety of goods and services without any tariffs restriction.

7. Monopoly power leads to fall due to high competition

8. Through specialization efficiency can be encourage by trade.

Cost of international trade:

1. The firms which has less efficiency power they exit from the market. Reason behind this the resources of allocation. Resources are reallocated only those firms which is growing in stage.

2. Competition results in loss of jobs and income inequality.

Workers who lose their job due to foreign imports reason….?

1. Economic dependence: the underdeveloped country is based on the developed country for the development of the economy, and these leads to exploitation of economy. For example the Africa and Asia both are underdeveloped countries and European countries are exploited them.

2. Political dependence: economy depends upon political situation. Such as Britishers came to India like as traders but they ruled by India from very long period.

3. Wrong utilization of natural resources: high exports sometimes negative impact on the natural resources hence will down the economic condition of the country.

4. Import of harmful goods: harmful goods like drugs, heavy articles effect adversely to the economy.

International trade impact on the job:

International trade huge impact on the workers job. Most of industries depends upon the outsourcing, in which they (company) directly hire the workers from foreign countries those can do same work as compare to local employees.