International Trade for Developed and Developing Economies

Topic: International Trade
Words: 309 Pages: 1

Nowadays, all the countries in the world participate in international trade regardless of their economic development level and mostly find such an interaction quite beneficial. Firstly, international exchange in goods allows the states to access the products they otherwise would not be able to manufacture, extract, or cultivate themselves. Secondly, similarly to the division of labor on the company level, international trade promotes specialization or reaching comparative advantage (Kone 2). It implies that although the countries may be able to produce most of the traded goods themselves, they prefer to concentrate their efforts on a limited number of products. This, in turn, is related to the increased worldwide productivity as well as greater benefits for all of the international trade participants. Additionally, this economic activity is related to the reduced risks as the shortage of certain commodities and services can be compensated through exchange with the neighbors. Finally, international trade is associated with reduced costs due to increased competition and comparative advantage.

In this regard, the analysis above suggests that the nations at a different level of development view international trade slightly differently. Whereas the developed countries consider it as access to the goods produced by cheap labor, the developing countries are greatly interested in technological and scientific advancements. Moreover, for the latter group, international exchange in products and services is viewed as a means to reduce poverty while for the former – as the way to sustain people’s well-being.

Finally, there is also a good reason why various economies should view international trade differently. As such, the countries at the lowest developmental stage would normally have negative attitudes towards the free trade agreements, while more-developed countries would mostly support them. It is explained by the fact that the least developed countries are still vulnerable to foreign competition and, thus, necessitate certain trade barriers to protect their main industries.

Work Cited

Kone, Salif. “USA–China Trade War in Light of the Limits of the Comparative Advantage Principle.” Management and Economics Research Journal, vol. 5, no. S4, 2019, pp. 1-12. doi:10.18639/MERJ.2019.961704.

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