Q.33. What are the advantages of International trade? Also discuss its
disadvantages.
ADVANTAGES OF INTERNATIONAL TRADE
Various advantages are named for the countries entering
into trade relations on a international scale such as:
A Country may Import Things Which
it Cannot Produce
International trade enables a country to consume
things which either cannot be produced within its borders or production may
cost very high. Therefore it becomes cost cheaper to import from other
countries through foreign trade.
Maximum Utilization of Resources
International trade helps a country to utilize its
resources to the maximum limit. If a country does not takes up imports and
exports then its resources remain unexplorted. Thus it helps to eliminate the
wastage of resources.
Benefit to Consumer
Imports and exports of different countries provide
opportunities to the consumer to buy and consume those goods which cannot be
produced in their own country. They therefore get a diversity in choices.
Reduces Trade Fluctuations
By making the size of the market large with large
supplies and extensive demand international trade reduces trade fluctuations.
The prices of goods tend to remain more stable.
Utilization of Surplus Produce
International trade enables different countries to
sell their surplus products to other countries and earn foreign exchange.
Fosters International Trade
International trade fosters peace, goodwill and
mutual understanding among nations. Economic interdependence of countries often
leads to close cultural relationship and thus avoid war between them.
DISADVANTAGES OF INTERNATIONAL TRADE
International trade does not always amount to
blessings. It has certain drawbacks also such as:
Import Of Harmful Goods
Foreign trade may lead to import of harmful goods
like cigarettes, drugs etc. Which may run the health of the residents of the
country. E.g. the people of China suffered greatly through opium imports.
It May Exhaust Resources
Internation trade leads to intensive cultivation of
land. Thus it has the operations of law of diminishing returns in agricultural
countries. It also makes a nation poor by giving too much burden over the
resources.
Over Specialization
Over Specialization may be disasterous for a
country. A substitute may appear and ruin the economic lives of millions.
Danger of Starvation
A country might depend for her food mainly on
foreign countries. In times of war there is a serious danger of starvation for
such countries.
One country may gain at the
expensive of Another
One of the serious drawbacks of foreign trade is
that one country may gain at the expense of other due to certain accidental
advantages. The Industrial revolution is Great Britain ruined Indian
handicrafts during the nineteenth century.
It May Lead To War
Foreign trade may lead to war different countries
compete with each other in finding out new markets and sources of raw material
for their industries and frequently come into clash. This was one of the causes
of first and second world war.
0 comments :
Post a Comment