We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What Are the Advantages of International Trade?

Jessica Ellis
By
Updated: May 17, 2024
Views: 17,958
Share

International trade is an ancient concept that remains controversial in the 21st century. The trading of goods, services, and labor across borders can have many pitfalls, but can also result in many benefits for all involved. Some of the advantages of international trade include market diversity and consistency, independence from local monopolies, cultural exchange, technological exchange, and potential for increased human rights and environmental protection standards. The advantages of international trade are not always inherent; many can only be exploited with the assistance of governmental regulations and social activism.

The size of a market is often defined by how many consumers have reasonable access to the available goods. In pre-modern times, a market might only be accessible to those within walking or riding distance. As a result, people were limited to the goods and services produced locally. The vast technological advancements in transportation and preservation helped widen markets, an effect known as “globalization.” One of the major advantages of international trade is that more consumers have access to a greater selection of goods, thanks to globalization.

One of the most helpful advantages of international trade in the agricultural market is the creation of consistent availability. Different climates mean that different areas can only produce certain fruits and vegetables at certain times of the year; for instance, in a temperate climate, strawberries may only be locally harvested in late spring. Thanks to warmer climates elsewhere and fast transportation, however, strawberries, as well as many other types of produce, can be supplied year-round, thanks to international trade.

The diversity of goods from international markets also helps protect consumers from the detrimental effects of monopolies. When there is healthy global competition, prices tend to drop, since consumers will gravitate toward the best deals. A lack of competition can lead to stagnation in the market, or worse, the cornering of the market by a single entity. When one local supplier controls the entire market, prices tend to skyrocket. One of the primary advantages of international trade is expanding consumer choice so that suppliers cannot establish monopolies.

Some people consider one of the most vital advantages to international trade to be the exchange of culture and technology that occurs through free trading. Sociologists frequently argue that cultural hatred and suspicion is bred from fear of the unknown; by giving different nations a chance to work with each other through trade, relationships can be strengthened and xenophobia dispelled. In technological areas, developing nations also frequently benefit from the influx of new technology from industrialized nations, which may allow faster improvement of infrastructure and business.

Though it is not always considered a priority, some environmental and social activists believe that one of the biggest benefits of international trade is the opportunity to improve environmental and labor standards throughout the world. By creating partnerships with nations that vow to use environmentally safe practices and provide fair wages and hours to workers, industrialized nations can help reduce ecological damage and improve human rights.

Share
WiseGeek is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Jessica Ellis
By Jessica Ellis
With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis brings a unique perspective to her work as a writer for WiseGeek. While passionate about drama and film, Jessica enjoys learning and writing about a wide range of topics, creating content that is both informative and engaging for readers.

Editors' Picks

Discussion Comments
By serenesurface — On Nov 12, 2013

I think that global trade is awesome because I love buying products made in different countries. My car is Japanese, my shoes are Chinese, my food is American and my shirt was made in Mexico. If it wasn't for trade, I would not have at least 70% of what I have now.

By bear78 — On Nov 12, 2013

@dljohn-- You've touched on one of the reasons why international trade is controversial.

Have you heard of the term comparative advantage in international trade?

A country is said to have a comparative advantage over another when it can produce a good at a lower price. Comparative advantage forms the basis of international trade. When countries sell goods they have a comparative advantage in, everyone benefits.

Not only does this allow consumers like you and me to get goods for cheaper, but it also increases the variety of goods that are available to us. Meanwhile, the economy also grows and our quality of life increases in the process.

The worker who gets laid off from his job won't be very happy about it. For this reason, some governments impose high tariffs on certain goods to protect that industry. So even though this can seem like a disadvantage, governments can avoid it if they want to.

By ddljohn — On Nov 11, 2013

Can someone tell me how it is advantageous for me when the factory I work at is shut down because that product can be bought for cheaper from another country?

Jessica Ellis
Jessica Ellis
With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica Ellis...
Learn more
Share
https://www.wisegeek.net/what-are-the-advantages-of-international-trade.htm
Copy this link
WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.

WiseGeek, in your inbox

Our latest articles, guides, and more, delivered daily.