What Are the Pros and Cons of International Trade?

Tuesday, February 11, 2014

When you head to your favorite shop in town, you may not realize that the purchases you make effect communities far from where you live. If you buy foods, clothing, books and toys that aren't manufactured in your area, you benefit not only the store which carries them but the corresponding companies that produce the goods you use daily. For decades, our relations with foreign nations have shaped the way people here do business, yet in recent times the call to support local farmers and manufacturers has gained strength. As a consumer, it's good to know the pros and cons of international trade as they effect you, your community, and the country.

Does trade with other nations hurt or hinder domestic economy? The novice student of international relations will be aware of which countries do well importing into and exporting from the Americas, while domestic workers may charge that foreign industries take away jobs. There are pros and cons to global industry, some of which are detailed here.

Pros of International Trade

  • Trade may offered goods and services not readily available through domestic or local distributors. There are certain plants, produce, and resources indigenous to foreign countries that we may not be able to make here. Even if it is possible, product quality may be better in the imports brought into the States. While it is nice to enjoy wines grown in California and Virginia, for example, some varietals of grape grow best in Italy and France, so if you want them you will need to connect overseas.

  • Some foreign imported goods may come at a better price in the long run. Even with shipping and transportation costs, some products may be ordered at affordable rates, depending on what you want. If that particular manufacturer is able to create bulk numbers in a reasonable time, domestic businessmen may benefit more.

  • Trade connections can increase awareness of and interest in American products. The more businesses deal with outsiders, the lines of communications are open to sell products as well as buy.

Cons of International Trade

  • Perhaps the biggest obstacle to overcome, speaking of lines of communication, is the language barrier. When dealing with distributors in countries where English is not a main tongue, one can become frustrated by such roadblocks. This in turn could lead to problems with delivery and orders.

  • Natural disasters and international conflicts may cause delays and breakdowns in supply chains. Retailers who previously bought coffee from Haiti and products from Japan likely had to rearrange their inventories until both countries are fully operational again.

  • As mentioned briefly above, domestic employment factors into trade as well. Jobs may not be completely lost to other countries, but many workers may find they need to alter their lives to suit changes in the economy.

One can see both sides of international trades - the benefits and challenges. How you make global business relations work for me depends on what you need, where your market is, and how you can overcome obstacles that threaten your business.