Trade in the local and international level posses things that make it good or bad. On the good side, trade leads to improved international ties that ensure improved international relationship. Trade association leads to agreements regarding international borders so helps to reduce wars. It also ensures efficiency in production as countries specialize and produce different products. Trade leads to technological innovation in an effort to increase productivity and cut on costs. Trade among nations helps to improve their standards of living. Trade creates jobs and in the U.S it is estimated to support 38 million jobs. Foreign trade also ensures each country makes optimum use of its natural resources and wastage of resources gets avoided. Trade enables producers and countries obtain goods they cannot produce (Uhlhaas, 2003). Trade at a global level enables production of large scale and developing nations gets access to machinery and equipment needed for their economic development. Trade also benefits consumers all over the world through perfect competition that ensure quality commodities.
Trade is also bad since it leads to dependence on some countries and producers. Small and local countries also do not benefit from foreign trade. Trade on a global level increases standards of living for all nations hurting those already in developing nations. Trade increases productivity which leads to pollution of the environment. Trade can also lead to economic imperialism. Countries that import more than they export face a deficit in their balance of payment which leads to international debt thus one nation gains at the exspense of the other (Connolly, 2010). Trade can lead to depletion of resources and imports may include hazardous products like drugs and cigarettes. Trade may lead to conflict as nations compete for scarce resources. Trade over specialization is dangerous due to the emergence of substitutes. Countries that depend a lot on foreign food end up starving in case of war.
References
Connolly, S.(2010). International Trade. Amicus Publishing
Uhlhaas, A.(2003). What are the main advantages and disadvantages of global free trade and does it exist in practice? GRIN Verlag
