Sample Economics Essay Paper on International Trade

Doing business across the globe involves countries participating in an exchange of goods and services for money either for profit or nonprofit making. International trade has both constructive and destructive implications on countries, populations, and economies (Stiglitz and Jay 23). Therefore, this paper will discuss two disadvantages and advantages of global trade, as well as a response that includes examples and evidence to support the ideas.

Advantages and Disadvantages of International Trade

For the countries with natural wide range of resources, international trade is beneficial to such countries because on exporting of the good produced, the country will earn foreign exchange   (Cavusgil 34). Additionally, international trade promotes healthy competition among participating countries in addition to leading to a country to enjoy comparative advantage. Due to fear of foreign competition, the prices of goods and services are kept at a reasonable price.

Despite the advantages of international trade, some disadvantages have been realized. If a restriction is not placed on foreign trade, domestic industries are affected since their good may not be bought at the expected prices due to competition reducing the gross domestic incomes of a country (Cavusgil 67). Moreover, a country may exploit her limited resource beyond sustainable limits in order to earn present export advantages that lead to depletion of essential resources which in turn affects the ability of future generations to utilize the same resources.

Response

International trade can be encouraged but restrictions should be made to a specific level to ensure that a country promotes local business while enjoying benefit of worldwide trade. Individual countries should be specific on goods and services to be exported, as well as those to be imported (Cavusgil 23). Even though a wider range of commodities is displayed, a country should specialize in what to export while promoting local industries.

Work Cited

Stiglitz, Joseph E., and Jay K. Rosengard. Economics of the Public Sector: Fourth International Student Edition. WW Norton & Company, 2015. https://books.google.co.ke/books?hl=en&lr=&id=miPeCgAAQBAJ&oi=fnd&pg=PR24&dq=T+HE++COSTS+AND++BENEFITS+OF++INTERNATIONAL++TRADE+&ots=VS3JVg6gx&sig=giA9W2zSXzEgSZme64rpQkbXMI&redir_esc=y#v=onepage&q=T%20HE%20%20COSTS%20AND%20%20BENEFITS%20OF%20%20INTERNATIONAL%20%20TRADE&f=false

Cavusgil, S. Tamer, et al. International business.Pearson Australia, 2014.https://books.google.co.ke/books?hl=en&lr=&id=KcSaBQAAQBAJ&oi=fnd&pg=PP1&dq=Advantages+and+Disadvantages+of+International+Trade:&ots=mzOgR INXt&sig=5dCwuwd1mqkvRvjQBq2qOquKQ4&redir_esc=y#v=onepage&q=Advantages%20and%20Disadvantages%20of%20International%20Trade%3A&f=false

Works Cited