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International Trade If this item does not open automatically you can open International Trade here 2 Page 10 of 12 Click to Launch Writing Assignment No. 1 Allow pop-ups and third-party cookies for functionality. Use a five paragraph format. The first paragraph should include a statement of purpose and thesis sentence. Use vocabulary from our course. Do not copy and paste from other sources. Unlimited attempts allowed until due date. Please carefully read and respond to feedback after attempting the essay MacBook Air

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More often than not, international trade is considered to be a boon to the world. It is only natural that it’s not possible for a county to be self sufficient in everything. Thus on the basis of comparative advantage, countries exchange goods & services to mutually benefit from each other. However there are downsides to international trade as well. The section presented below looks into two advantages & two disadvantages of international trade.

Firstly, there are limited resources in the economy with unlimited wants. More specifically, resources vary geography and climate wise from country to country. Some countries on the other hand are blessed with resources like oil. UAE is one such example. Therefore, utilizing its comparative advantage in oil, UAE’s highest share of exports is in crude oil. The rest of the world imports crude oil from this region. However, the oil will be useless to UAE if they cannot utilize it through proper machinery. Thus, UAE imports modern machinery, state of the art technology and certain food items which are not possible to be grown in its climate.

Secondly, international trade not only happens in goods, but also in services. For example, India has the comparative advantage of cheap labour and uses that to export their services in IT, education etc to different parts of the world. Not only are the importing countries being entitled to quality services at lower costs but also are increasing their profits by keeping the revenue the same but reducing the cost.

However, there are certain visible disadvantages when it comes to international trade. Firstly, there is tremendous pressure on small domestic industries which fail to thrive in the face of global competition and go out of business. This is harmful for the importing country and its citizens. Instead of encouraging small industries to carry forward the heritage of the country, imports result in erasing one’s own culture and getting used to consumption habits from abroad at the cost of its own people.

Secondly, if one is a small & the other a large country then the small country is under political pressure from the large country. Nowadays even though the fear of colonizing territories is not there, but somewhere the small countries have to give in to the demands of the large countries and experience reduced surplus from international trade.

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