Advantages & Disadvantages Of International Trade

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Advantages & Disadvantages Of International Trade

ADVANTAGES AND DISADVANTAGES OF INTERNATIONAL TRADE

International trade allows countries to exchange good and services with the use of
money as a medium of exchange. Several advantages can be identified with
reference to international trade. However international trade does have its
limitations as well. Discussed below are both advantages and disadvantages of
international trade.

Advantages
• Greater variety of goods available for consumption – international trade brings in
different variety of a particular product from different destinations. This gives
consumers a wider array of choices which will not only improve their quality of
life but as a whole it will help the country grow.

• Efficient allocation and better utilization of resources since countries tend to

produce goods in which they have a comparative advantage. When countries
produce through comparative advantage, wasteful duplication of resources is
prevented. It helps save the environment from harmful gases being leaked into the
atmosphere and also provides countries with a better marketing power.

• Promotes efficiency in production as countries will try to adopt better methods of

production to keep costs down in order to remain competitive. Countries that can
produce a product at the lowest possible cost will be able to gain a larger share in
the market. Therefore an incentive to produce efficiently arises. This will help
standards of the product to increase and consumers will have a good quality
product to consume.

• More employment could be generated as the market for the countries’ goods
widens through trade. International trade helps generate more employment through
the establishment of newer industries to cater to the demands of various countries.
This will help countries bring down their unemployment rates.

Disadvantages
• It could lead to a more rapid depletion of exhaustible natural resources. As
countries begin to up their production levels, natural resources tend to get

What are the advantages and disadvantages of international trade?

In: Importing and Exporting, Business Globalization [Edit categories]
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Answer

Advantages of Trades Unions.

1. Increase wages for its members.

Industries with trade unions tend to have higher wages than non-unionised
industries.

2. Counterbalance Monopsonies.

In the face of Monopsony employers, Trades Unions can increase wages and
increase employment. Monopsony employers are those who have market power in
setting wages and employing workers. Traditionally, monopsonies occur when
there is only 1 firm in a town, or type of employment. However, in modern
economies, many employers have a degree of market power (monopsony).

3. Represent Workers

Trades Unions can also protect workers from exploitation, and help to uphold
health and safety legislation. Trades unions can give representation to workers
facing legal action.

4. Productivity deals.

Trades Unions can help to negotiate productivity deals. This means they help the
firm to increase output; this enables the firm to be able to afford higher wages.
Trades unions can be important for implementing new working practices which
improve productivity.

5. Important for Service Sector.

Modern economies have seen a fall in trade union power. This is because of a
decline in manufacturing and rise in service sector employment. Service sector
jobs tend to more likely to be part time and temporary; unions are needed to protect
workers in these kind of jobs.

Problems of Trades Unions.

1. Create Unemployment.

If labour markets are competitive, higher wages will cause unemployment. Trades
unions can cause wages to go above equilibrium through the threat of strikes e.t.c.
However when the wage is above the equilibrium it will cause a fall in
employment.

2. Ignore non Members

Trades unions only consider the needs of its members, they often ignore the plight
of those excluded from the labour markets, e.g. the unemployed.

3. Lost Productivity.

If unions go on strike and work unproductively (work to rule) it can lead to lost
sales and output. Therefore their company may go out of business and be unable to
employ workers at all.

4. Wage Inflation.

rok sha mara.........................adil said

Advantages
Advancement of poor countries, socially and economically.
Education, living standards, the quality of life is raised, therefore, people are
enjoying life and have places to go and sights to see. Less of a chance of social
decay, providing lifestyles do not stagnate. More productive, efficiency,
technology removes the burden of physical and repetitive labor. Less labor equals
more time for people to be with family and more leisure leads to advancement of
the arts and sciences.
Disadvantages
Dependency and exploitation of cheap labor. The slow down of progress, due to
money shifted to cheap labor markets. The sell out of equities. Debt. Greed. Trade
imbalances. Political power shift because of import trade lobbiest vs. businesses
exporting goods. Stagnation of wages. Stagnation of living standards. Reduced
investment in education. Reduced spending eroding innovation, sciences,
technology. Dependencies on others. Political gain by providing low paying jobs
that does not raise society, but inefficiently uses labor for industries that capitalize
on cheap labor. Longer hours, therefore less leisure time. Less family time equals
higher divorce rate. Markets capitalize on social decay from stagnant livestyles
further lowering standards of a civilized society. The golden rule, who ever has the
gold makes the rules, hopefully China will be good to us.

 4 years ago

International Currency Trading - Advantages and Disadvantages of

Currency Trading
By Kelly Price

Article Word Count: 474 [View Summary] Comments (0)

International currency trading offers a route to financial freedom but there are
advantages and disadvantages of trading and here you can look at them and decide
if currency trading is for you...

First international currency trading is just that - its an international business and
today anyone can get involved all around the world and lock into the worlds
biggest business opportunity.

Its not just the big guys and traders are opening accounts online all the time
seeking big profits but a word of caution - 95% of traders lose because despite the
advantages they don't approach this business seriously.

Here are the main advantages first

- Anyone can learn currency trading no college education required

- You can do it quickly in about 2 weeks and be making big profits in about 30
minutes a day

- You only need 100 to open an account and can leverage this by 200: 1 or more

- Your only other overhead is a computer and an online connection

- You can seek big profits everyday and there is never a recession

Really it is the perfect home business and while anyone can learn to win, there are
certain disadvantages and here are a few.

- It's a challenge to be a trader and you need to do it on your own.

Don't fall into the trap of following junk robots or scientific regular income
nonsense - it's a big boys and girls game and relies on your education and your
mindset to maintain discipline, which will ead you to success.

- You need to use leverage wisely 200: 1 forget it on a small account 10 - 20: 1 is
enough more novice traders wipe themselves due to over leverage than any other
reason.

- You must learn to play great defence first and make sure you understand how to
cope with volatility.

Picking long term trend direction is easy; trying to get in and out with your trading
signals at the best times is hard.

The Challenge

Most traders get the trend direction right but get stopped on a recoil back and then
see the currency move back the way they thought piling up thousands of dollars
and their not in - the challenge is to trend follow and manage volatility.

Make sure your forex trading strategy can cope with it or your in with the 95%
who lose.

The Opportunity

International currency trading is tough but you would expect that with the amount
of money you can make.
For the trader who has a burning ambition to succeed and stand on their own and
take responsibility, this is a great business and if you approach it as a business and
take your losses and run your profits, you can enjoy a great second or even life
changing income and enjoy currency trading success.

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