What Are The Advantages And Disadvantages Of International Trade

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Advantages and Disadvantages of International Trade
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Advantages and Disadvantages of International Trade
Introduction
The exchange of goods and services among countries is known as international trade. It is the foundation of a global economy, where prices, supply and demand factors affect and are affected by events all around the world. Such trade provides an opportunity for countries to be exposed to products unavailable domestically and to provide their local products to foreign markets (Heakal, 2015). The following sections will discuss the benefits and drawbacks of international trade.
Advantages of International Trade
Given that the world is interdependent, economic progress of a country depends upon its relations with other nations (Shukla, 2009). Through strong international trade, economies have flourished and gained power to control and steer the global economy (Economy Watch, 2010). Over the years, it has offered a wide range of benefits to various economies across the globe. The rising importance of international trade has been fueled by contemporary production techniques, innovative transportation systems, transnational organizations, outsourcing activities and expeditious industrialization (Economy Watch, 2010).
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Local production can suffer as domestic industries become dominated by foreign competitors and go out of business (Shukla, 2009). As a result, the local economy can become dependent on foreign economies, leading to loss of local employment (V.Vijayasri, 2013). Overdependence on affluent economies can be risky as they can impose their political agendas on weaker economies in order to exploit them (Shukla, 2009). Exploitation also occurs in the form of embargoes and other trade restrictions imposed in case differences arise among trading nations (V.Vijayasri,
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