Other than that, it would speed up the industrialization where this international trade enables a country to acquire a skill machinery and other capital equipment from industrially advanced countries for speeding up the industrialization. In addition, there are also extension means of transport such as where the goods are exchanged from one country to another it leads to an extension of the means of communication and transportation.
Next, international trade could increase the standard of living because when more production meets demand worldwide, the higher the production, the higher the income and the higher the standard of living and with that it could provide more employment opportunity. Besides that, there is also a greater variety of goods for consumption which gives consumers a wide variety of choices such as consumer or capital goods when it comes to trading with one another. Another advantage is the sharing of technology where the countries who are working together could share their technology with one another for example The United States and Malaysia where the United States has higher and better technology.
However, there are also disadvantages for the international trade. Even though both countries could work well together but one of the problems is there could be a language barrier between both countries, for example Japan and Malaysia. The diversity of languages creates problem in the foreign trade where both of the countries would find difficulty when it comes to working together. Next, the international trade could also lead to importing of harmful goods such as cigarettes, drugs which are demerit goods and could ruin the citizen’s health of the country such as China which suffers from opium transport.
Besides that, it may exhaust resources for example, intensive cultivation of the land thus it has operation of law of diminishing returns in agricultural countries and make the poor by exerting too much burden over the resources. Next, one country may gain at the expenditure of another country whereby one country may gain at the expense of other due to certain accidental advantages for example the industrial revolution in Great Britain ruined Indian handicrafts during the 19th Century.
In addition, when there is a time of emergency in any of the countries such as war and the country which specializes in the production of those commodities in which it has comparative advantage over other countries and the country may not be able to get essential supplies thus the whole economy may be crippled. Other than that, it may lead towards a long distance trade, sometimes international trade may be difficult to maintain the close relationship between the seller and buyer because of the long distance between both countries.
In conclusion, international trade maybe useful at most times but has disadvantages at the same time as well. However, international trade is still widely used by all countries in the world because most countries need to depend on one another to get the things they want.