International Trade Advantage

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International trade is the exchange of goods, capital between countries and region, which has given rises to the global economy. International trade allows countries and region focus on their comparative advantage, so it should benefit each trading partner. Economics is the allocation of resources and international trade allows us to go beyond just one nation’s resources to manage the planet’s resources, which may benefit a nation more than another one but overall it is helping us to use our resources effective. In its simplest form, trade is basically why we have the concept of supply and demand as for the simple reason that if it’s not possible to exchange money for a good or the reverse then we will be forced to produce everything we need …show more content…

Trade allows people to specialize in their comparative advantage without causing any major amount of long-term unemployment, but the scale of international trade is significant as many workers most times have to accept jobs that offers a lesser amount in pay or fewer benefits than they had before, which means that nations do not have any guarantee that the jobs outsourced caused by international trade will be replaced with better jobs that require similar skills in a short period. Workers can acquire skills that will help them obtain better jobs than they used to have, but the process of these skills could take some weeks or a couple of years. Developed economies are typically richer than developing economies, and will buy assets from developing economies when they feel it’s economical to do so. Foreign direct and portfolio investments by a nation may feel like exploited as buying their natural resources and using the cheap labor available in the country. In the long-term a developing economy will become richer and get closer to purchasing-power parity with their trading partners, but it’s not a quick transition. Many developing economies do not have many laws on labor or pollution, so a company could take advantage of their citizens by putting them to work in horrible working conditions or possibly pollute local water souces, which can give citizens a lower quality of life than they had before. Most times it’s not a completely win-win situation as even if a trade deal will be a win-win for everyone involved there will be some people who can be harmed by it and usually nations do not help the groups

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