International trade involves the exchange of goods and services across borders, facilitated by technological advances. It impacts economies, employment, outsourcing, and unfair labor practices, benefiting both developed and developing countries but also leading to exploitation of cheap labor in some cases.
International trade is trade that transcends international borders. This is in direct contrast to internal trade, which is trade that occurs within a local territory or market. International trade has been possible thanks to technological advances that facilitate communication and coordination of the transfer of goods and services across territories. The impact of international trade can be seen in several areas, including the economy, employment, outsourcing, and unfair labor practices.
An impact of international trade is its effect on the economy of the nations that participate in the trade. This effect is felt by both less developed and more developed nations. The more developed countries benefit by buying raw materials and finished products from less developed countries. Least developed countries gain by gaining much-needed financial resources from trade. For example, some developing countries in Africa and the Middle East have some natural resources such as crude oil, metals, and precious stones that they can sell to other countries in exchange for financial resources. In fact, the economies of some of these countries are dependent on financial resources. Most of the developed countries that do not have resources like crude oil are highly dependent on supplies from these nations.
International trade also has a strong effect on employment in the most developed countries. Most companies now engage in outsourcing, which is a direct result of international trade. These companies prefer to hire workers from other countries who can do the same or more work than their local employees for a fraction of the cost. This reduces the number of jobs available to the local labor force. It can also lead to unfavorable competition in which local workers are forced to compete with international workers from countries with lower living standards who are willing to do the same work for less than the minimum wage.
This particular impact of international trade leads to fears that some unscrupulous trading partners may exploit cheap labor in a way that is detrimental to workers in poor countries. For example, some western companies relocate their businesses to some Asian countries with lax labor laws where they tend to exploit the local workforce by paying them very little compensation for hard work. Some concerns are also being raised about the potential for the use of petty labor in the manufacturing sector, especially in the garment and toy manufacturing sectors. This is an undesirable impact of international trade.
Smart Asset.
Protect your devices with Threat Protection by NordVPN
