International Trading

International Trading

Shari L Kraus

XECO/212

February 29, 2012

Kristin Paul

Introduction

International trading is where countries exchange goods, services, and money without that many barriers. Just like moat everything else, international trading comes with advantages and disadvantages.

One advantage to international trading is the large variety of goods that are available. You can get different varieties of clothing, auto parts, just about anything. Another advantage is the efficient use of a country’s resources. When countries manufacture goods through comparative advantage, which means they have the ability to manufacture goods using less inputs than other manufacturers, they avoid duplication which helps preserve the environment. One more advantage to international trading is that it makes production more efficient because the different countries will keep coming up with improved production methods in order to keep production costs down and to beat the competition (chapter 9, Application: International Trading).

One disadvantage of international trading is that it could cause pollution and other environmental disasters because companies do not invlude the costs of pollution control and environmental protection into the costs of their goods when they are in competition with companies in countries where the environmental laws are weaker. Another disadvantage of international trading is short-term structural unemployment. When trade barriers are removed, workers may find it hard to find employment and may require unemployment assistance until they can find a job (hsc.csu.edu). One more disadvantage of international trading is unfair competition. Many people feel that free trade is acceptable if all the countries involved play by the same rules. If every country went by different regulations it would be unfair to have businesses compete in an international marketplace (chapter 9, Application: International Trading).

Conclusion

International...