Impact of International Trade


International relations have had many fruits with one of them being international trade. International trade is a setting where countries come together and trade amongst themselves with each one offering the commodities they produce best thereby creating a global market. Ideally, it is supposed to be a peaceful global trading environment, and in some sense it is. However, there are also encumbrances to this system, and this seems to nations suffering demerits every once in a while. Given that the trade has been going on for a long time it is acceptable that the merits outweigh the demerits.

Optimum Resource Utilization

International trade offers a market for all countries to provide the products they are best suited to produce. This implies that a country can concentrate on using its natural resources available adequately in within their boundaries (Vernon, 2014). The nations do not struggle to improvise on alternative use of resources to substitute the unavailable resources since they can easily acquire them in the global market. Natural resources will, therefore, be used adequately and eventually the country will enjoy enormous economies of scale about those particular resources. For instance, nations rich with crude oil have been important in international trade since they offer global fuel sources and in return, they get food supplies bearing in mind they are mainly located in arid areas(Vernon, 2014).b)

Technical Exchange

International trade allows developing nations to acquire technology from the developed countries and thereby to better their production (Vernon, 2014). With the acquisition of modern and more efficient technology, these countries contribute better to global advancements. The developing countries are also a key player in the provision of cheap labor which a key component in business. International trade is, without a doubt, two-way traffic where every stakeholder has something to gain (Abd-el-Rahman, 2006). Developing nations use the machinery to create new and more efficient industries and to use their natural resources more efficiently. Developing nations acquire machinery which they lack, and in return, they offer labor, food and other natural resources to the developed countries.

Demerits of International Tradea.

Impede Home Industry Development International trade calls for countries to specialize in particular commodities, therefore, some industries grow while some remain primitive. Nations concentrate on utilizing their most available natural resources to enjoy substantial economies of scale, but in the process, there is neglect of other industries (Abd-el-Rahman, 2006). The interdependence among the nations results to countries importing everything they do not produce instead of finding a way to produce their own.

For instance, a country rich in its agriculture will invest in agricultural products and pay little or no regard to their production industry. The result is that the production will die off while the agriculture flourishes.b. Mis-Utilization of Resources Given that nations are expected to offer the products they are best at most will not consider the extent to which their resources are being exploited. The fact that a country is suited to produce certain items is a stimulant to excessive use of resources due to excessive exportation. In the end, resources are used inappropriately to sustain the demand (Egan, 2002). An example is a nation with crude oil deposits, and since crude oil is in high demand, the country will export a lot of the oil just to meet the demand. The result of the export is exhaustion of the reserves. A country famous for coffee will keep producing coffee and pay little attention to the effects of mono-cropping on their soils.


International trade has many disadvantages but what is to be gained is far more precious. To curb the disadvantages, there are rules set on the expected contributions of a certain product from certain countries, and this acts as a management for the extent to which resources are used. International trade is beneficial to extreme degrees, but this should not be a hoodwink for the disadvantages in brings about. In the end, everything is weighed, and the most positively impactful is the way to go.


Abd-el-Rahman, K. (2006). Firms’ competitive and national comparative advantages as joint determinants of trade composition.В Review of World Economics,В 127(1), 83-97.Egan, M. (2002). Setting standards: strategic advantages in international trade.В Business Strategy Review,В 13(1), 51-64.[bookmark: _GoBack]Vernon, R. (2014). International investment and international trade in the product cycle.В The quarterly journal of economics, 190-207.

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Impact of International Trade. (2018, Sep 18). Retrieved February 7, 2023 , from

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