Benefits of International Trade

In principle, the benefits of international trade to a country exceed the costs, no matter whether the country is importing or exporting. In practice, it is not always possible to compensate the losers in a country—for example, workers who lose their jobs due to foreign imports. In your opinion, does that mean that trade should be inhibited to prevent losses? 

No, trading internationally must be imposed continuously as a success or wealth of the country must not be based on costs or how much gold or silver that the country has, but it must be based on the capacity of the country to provide the needs and sustain the set living standards of its people. Besides, discouraging trading is not an option to prevent losses as it is not the only factor why the country suffers losses. The success or failure of the country depends on how they manage the resources that they have and are able to nurture them. In fact, an increase in healthy competition in trade even contributes to igniting the countries to innovate as well as specialize to offer various options for consumers. Also, through this, it can increase the demands of the domestic or either foreign products and have a balance of trade. These lowered prices are also beneficial for both trading countries and raise the purchasing power of consumers. In addition, although countries can have an absolute advantage, no country can have a comparative advantage in the production of all goods and services that’s why trade enters the narrative. In order to balance the supply and demand, there must be well-implemented policies of trade that are agreed upon by both trading countries. Thus, in order for the country to develop, grow, and achieve economic success, it depends on how they manage its resources and how it builds healthy relationships as well as connections to other neighboring countries. Therefore, inhibiting trade will not prevent losses but further aggravate the situation and increase more the losses due to wasted opportunities that the trade may possibly contribute to the country’s economy if wisely managed.

Does international trade create winners or losers? 

Trading internationally can create either winners or losers. Countries' wealth depends on how they manage their trading systems and how they are able to balance their trade transactions between the neighboring countries. One of the determinants of being a winner in international trading is that, first, consumers have the option to purchase imports from countries that produce at a lower cost. These lower costs increase the demand for the products and thus contribute to the higher production of goods and services as well as a wider variety of options for consumers to choose from. Second, when faced with cheaper competition, domestic producers may lower their prices to remain competitive. With this, it is crucial to have healthy competition between countries as this will encourage them to innovate as well develop products that will satisfy the consumers and set prices that are inclined with their purchasing power. Third, domestic producers may import less expensive inputs and charge lower prices. Because of these channels, countries can win international trading by focusing on the competitive advantages and have free trading rather than implementing restrictions as well as barriers to trade that harms the economy of the country and result in being a loser in terms of international trading.