Nature and scope of international trading
Nature and scope of international trading
Benefits
- Wider choice of goods and services
- Creates competition
- Specialization, comparative advantage
- Political and social links
Drawbacks
- Loss of output and jobs from domestic firms cannot compete effectively with imported goods
- Switch of making goods will cause job losses and factory closure
- Decline in domestic industries
- Loss of foreign exchange
- Some importers may dump goods at below cost price to eliminate competition
