Explain the drawbacks of international trade.
Or, State the disadvantages of international trade.
The major disadvantages of international trade are:
1. Dependency:
As a result of international trade, the self-sufficiency of the country is damaged. In particular, interdependence increases.
2. Unequal competition:
International trade results in unequal competition between strong and weak countries. It affects weak and underdeveloped countries more and hampers their industrial development.
3. Ignoring internal needs:
In many cases, goods are exported abroad to earn foreign exchange, ignoring domestic demand, despite a shortage of supply. As a result, the domestic demand of the country remains unfulfilled.
4. Political and economic influence:
As a result of unequal competition, stronger nations exert political and economic influence over weaker nations by taking advantage of international trade.
5. International Conflict:
Most countries try to gain monopoly rights in international markets through international trade. As a result, international peace and security are disturbed.
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