International trade, the exchange of commodities between nations, comes with various
advantages and disadvantages. The idea of international trade is to ensure that resources are
optimally used. Countries have an opportunity to produce what is within their ability and sell to
those who have shortages as they also produce to cover areas that they have shortages. Whether
you are importing or exporting there are various benefits to it as well as many costs related
problems. Two advantages of exporting goods are that it creates jobs and boosts the economic
growth. Just how there are advantages, there are disadvantages of international trade, two being
that it can reduce jobs in domestic industries that cannot compete with the global scale of imports,
as well as starting a dependency on developed countries.
More jobs and employees are required to produce items when a country is exporting a good
that they have an absolute advantage compared to another producer. When the country has an
absolute advantage then they have less of an opportunity cost to produce such items. By having
importation and exportation, allows different nations to specialize in areas that they would do best.
Which would initially lower the cost of production and more jobs established to harvest this good
for their advantage. Trade also allows spread of technological knowledge, which includes the
machines used in production thus allowing for economic growth. The production of jobs allow the
unemployment rate to decrease in that country and more people are willing to spend money; which
leads to a flowing economic growth and a cost effectiveness in products.
The economy starts to grow and flow when citizens start spending money once they have
a steady income. With the creation of more jobs and the decrease of the unemployment rate, there
is more production of money, which means more money is in the economy. That means people are
demanding more goods and services and companies are supplying more of those goods and
services. Technology improves the economic growth in a country; which has a support by
international trade and that is bringing out that expertise in technology for imports/exports
productions. With the help of technology, competition among the global market allow for
manufacturers and producers to enhance their efficiency. By doing so, the quality of goods is also
improved. International trade, also, creates stability in prices of commodities around the world.
Although these two advantages are a big help to growing countries, there are also disadvantages
to many countries. Nations that do business must have good diplomatic relations. As a result,
commodities are available to every nation regardless of the producer through imports and exports.