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Advantages and Disadvantages of International Trade??

This is a discussion on Advantages and Disadvantages of International Trade?? within the General Business forums, part of the Business category; Hello Friends Advantages * Enhance your domestic competitiveness * Increase sales and profits * Gain your global market share * ...

  1. #1
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    Default Advantages and Disadvantages of International Trade??

    Hello Friends

    Advantages

    * Enhance your domestic competitiveness
    * Increase sales and profits
    * Gain your global market share
    * Reduce dependence on existing markets
    * Exploit international trade technology
    * Reduce dependence on existing markets
    * Exploit international trade technology
    * Extend sales potential of existing products

    Disadvantages

    * You may need to wait for long-term gains
    * Hire staff to launch international trading
    * Modify your product or packaging
    * Develop new promotional material
    * Incur added administrative costs
    * Dedicate personnel for traveling
    * Wait long for payments

    Have a nice day

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    Default Re: Advantages and Disadvantages of International Trade??

    The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global trade can become one of the major contributors to the reduction of poverty.

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    Default Re: Advantages and Disadvantages of International Trade??

    The advantages of globalisation (an economic view)

    The economic benefits that greater openness to international trade bring are:

    ♦ Faster growth: economies that have in the past been open to foreign direct investments have developed at a much quicker pace than those economies closed to such investment e.g. communist Russia
    ♦ Cheaper imports: this is down to the simple fact that if we reduce the barriers imposed on imports (e.g. tariffs, quota, etc) then the imports will fall in price
    ♦ New technologies: by having an open economy we can bring in new technology as it happens rather than trying to develop it internally

    Disadvantages of globalisation

    The negative drivers of globalisation included culture which is a major hold back of globalisation. An example of how culture can negatively affect globalisation can be seen in the French film industry. The French are very protective of this part of their culture and provide huge grants to help its development. As well as government barriers market barriers and cultural barriers still exist.

    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    Advantages

    * Optimum use of Resources: Foreign trade helps in the optimum use of natural resources and avoid wastage of resources.
    * Stable Price: It ensures the presence of stable price by avoiding wide fluctuations in prices. It tries to equalize the world price.
    * Availability of all types of goods: It enables a country to import those goods which it cannot produce.
    * Increased Standard of living: It ensures more production to meet the demand of the people of different countries.
    * Large Scale production: It ensures large production because the production is carried on to meet the demand of its people as well as world market.

    Disadvantages

    * It could lead to a more rapid depletion of exhaustible natural resources.
    * It is a long distance trade and as such it becomes difficult to maintain close relationship between the buyer and the seller.
    * Each country has its own language. As foreign trade involves trade between two or more countries, there is diversity of languages. This difference in language creates problem in foreign trade.
    * Foreign trade involves preparation of a number of documents which also creates difficulties in the way of foreign trade.
    * Some restrictions are imposed on export and import of commodities. These restrictions stands on the progress of foreign trade.
    * Foreign trade involves a great deal of risks because trade takes place over a long distance. Though the risks are covered through insurance, it involves extra cost of production because insurance cost is added to cost.

    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    • Greater variety of goods available for consumption – international trade brings in different varieties 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.

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi

    Advantages to consider:

    Enhance your domestic competitiveness
    Increase sales and profits
    Gain your global market share
    Reduce dependence on existing markets
    Exploit international trade technology
    Reduce dependence on existing markets
    Exploit international trade technology
    Extend sales potential of existing products
    Stabilize seasonal market fluctuations
    Enhance potential for expansion of your business
    Sell excess production capacity
    Maintain cost competitiveness in your domestic market

    Disadvantages to keep in mind:

    You may need to wait for long-term gains
    Hire staff to launch international trading
    Modify your product or packaging
    Develop new promotional material
    Incur added administrative costs
    Dedicate personnel for traveling
    Wait long for payments
    Apply for additional financing
    Deal with special licenses and regulations..

    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    1. Increased free trade between nations
    2. Increased liquidity of capital allowing investors in developed nations to invest in developing nations
    3. Corporations have greater flexibility to operate across borders
    4. Global mass media ties the world together
    5. Increased flow of communications allows vital information to be shared between individuals and corporations around the world
    6. Greater ease and speed of transportation for goods and people
    7. Reduction of cultural barriers increases the global village effect

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    Default Re: Advantages and Disadvantages of International Trade??

    Advantage :-

    1.Spur of foreign competition: foreign competition will encourage domestic producers to increase efficiency. Carbaugh (1998) states that global competitiveness is a bit like golf, you get better by playing against people who are better than you.

    2.Increase consumer income: multination will bring up average wage levels because if the multinationals were not there the domestic companies would pay less.

    3.Increased investment opportunities: with globalisation companies can move capital to whatever country offers the most attractive investment opportunity. This prevents capital being trapped in domestic economies earning poor returns.


    Disadvantage:-

    1.Incur added administrative costs

    2. Dedicate personnel for traveling

    3.Wait long for payments

    Also there is the loss of sovereignty that globalisation brings. Many anti-globalisation believers state that nations are loosing their identity and selling their soul.

    Then there are environmental factors of globalisation as described earlier. These are becoming more and more controversial.

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    Default Re: Advantages and Disadvantages of International Trade??

    Hello
    The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Nations with strong international trade have become prosperous and have the power to control the world economy. The global trade can become one of the major contributors to the reduction of poverty.

    David Ricardo, a classical economist, in his principle of comparative advantage explained how trade can benefit all parties such as individuals, companies, and countries involved in it, as long as goods are produced with different relative costs. The net benefits from such activity are called gains from trade. This is one of the most important concepts in international trade.

    Adam Smith, another classical economist, with the use of principle of absolute advantage demonstrated that a country could benefit from trade, if it has the least absolute cost of production of goods, i.e. per unit input yields a higher volume of output.

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi
    Advantage : • 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.

    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.

    Disadvantage

    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.

    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi

    Thanks for sharing this nice information .. 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.

    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    surpluses could accumulate foreign exchange. Increasing wealth for the country. At the same time a surplus can also enhance the country’s image. The deficit will be caused by foreign exchange shortages, many developing countries foreign exchange shortages, because they are always a deficit. Deficit at the same time many things can cause economic disruption. But not a surplus as possible. If exports are low value products. Trade surplus is only temporary. The deficit is not necessarily bad. Imported high-tech words. Deficit does not matter

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    Default Re: Advantages and Disadvantages of International Trade??

    Advantages :-
    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.

    disadvantages :-
    1. Create Unemployment.
    2. Ignore non Members
    3. Lost Productivity.
    4. Wage Inflation.

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    Default Re: Advantages and Disadvantages of International Trade??

    advantage is very quicky and convenient
    disadvantage is sometimes not sincerly.

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    Post Re: Advantages and Disadvantages of International Trade??

    for the International Trade market what advantage occur in your mind . I think globalization then you will get market places and soon you will get more customers around your business .you can expand your business potentially when you have great and skills human power.and after that you will get more demand for your products.then delivers your product on time or within time or before time your customer will increase around the time period ,finally you will set vast business.

    But the disadvantage in my point of view will some like your financial condition, your business agreement with the other countries government, poor strategies.

    Thanks to all readers in advance.

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    Default Re: Advantages and Disadvantages of International Trade??

    Advantages:

    1. Increase wages for its members.
    2. Counterbalance Monopsonies.
    3. Represent Workers
    4. Productivity deals.
    5. Important for Service Sector.

    Disadvantages:-

    1. Create Unemployment.
    2. Ignore non Members
    3. Lost Productivity.
    4. Wage Inflation.

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    Default Re: Advantages and Disadvantages of International Trade??

    Still now i dont know anything about the international trade., now really i feel very thanks to you...

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi

    Advantages

    • Greater variety of goods available for consumption – international trade brings in different varieties 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.

    Disadvantages to keep in mind:


    • You may need to wait for long-term gains
    • Hire staff to launch international trading
    • Modify your product or packaging
    • Develop new promotional material
    • Incur added administrative costs
    • Dedicate personnel for traveling
    • Wait long for payments
    • Apply for additional financing
    • Deal with special licenses and regulations



    Thanks

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi

    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.

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    Default Re: Advantages and Disadvantages of International Trade??

    Hi

    The following are some of the advantages of foreign trade:

    Optimum use of Resources: Foreign trade helps in the optimum use of natural resources and avoid wastages of resources.

    Stable Price: It ensures the presence of stable price by avoiding wide fluctuations in prices. It tries to equalise the world price.

    Availability of all types of goods: It enables a country to import those goods which it cannot produce.

    Increased Standard of living: It ensures more production to meet the demand of the people of different countries. By increased production, it becomes possible to increase income and the standard of living of its people. It also increase the standard of living by increasing more employment opportunities.

    Large Scale production: It ensures large production because the production is carried on to meet the demand of its people as well as world market. Large scale production also ensures a great deal of internal economies which reduces the cost of production.

    Thanks

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