Question

Before international trade, each governmental unit would practice isolationism, or providing for its people with its own resources. Why is global trade beneficial? the response has to be 100-150 words.

Answer 1

Global trade is beneficial and it has many reasons to believe it. The first reason is that it creates opportunities and makes nations to specialize their production on the basis of their own expertise, resource abundance and comparative advantage.  It makes nations to first increase the production level, and then export the additional output in other nations as a part of the international trade. On a similar note, other nations, will come up and use domestic market to cater their own products. The second reason is the development of competition in the domestic market, making domestic players to be competitive when overseas firms come to the domestic market. It benefits the consumers as they have better quality products at a competitive price. The third reason is the flow of capital as a part of FDIs that is used for infrastructure or other projects that create new jobs, other than reducing the burden of spending upon the government. Besides, the nations develop strategic front and fight for their concerns collectively, when they engage in international trade. It is often observed in WTOs and or UNOs when a concern is discussed. So, global trade is beneficial in different dimensions.