INTERNATIONAL TRADE: PROS & CONS

INTERNATIONAL TRADE: PROS & CONS

   International trade has existed for a long time. The Silk Route, which ran from China and India across many Mediterranean countries, was a perfect embodiment of international trade. It was an important factor in the economic and political interactions between civilizations of Europe, Arabia, and Persia. People has been searching for new way to expand international trade. The 14th century was dedicated to this purpose. Bartholomew Dias rounded the tip of Africa in 1481. Later, Christopher Columbus, under Spanish royal's orders to search for an alternative trade route with the Spice Islands, accidentally embarked upon a new world which was later known as the Americas.


   International Trade still play a key role in today economic and political world. Let's examine the pros and cons of International Trade:


PROS

1) International trade allows for surplus goods to be sold to another country that lack the resource. Microsoft and Apple has been trading domestically and globally to expand their profits.

Certain developing countries do not possess the skills and technology to make these modern products. Therefore, in the process, these big companies gain more sales, which would not be possible if they had remained domestic.




2) Global trade does not only means the flow of goods and capitals between countries. It also means the flow of ideas and cultures. For example, when Russia 17th century actively expanded their tradings with other countries, the czar himself adopted many western ideas in hope of modernizing the country. In the next 30 years, Russia soon became one of the top 5 major power in Europe.




3) When countries actively trade with each other, their economies become dependent on each other. This act as a deterrence for war. Chinese and American economies are dependent on each other. Had they engaged in war, it would be detrimental for both sides.


CONS:


Global trade connects the world and form a uniform economic web. That may not always be beneficial. In 1929 when the U.S Stock Market crashed, it caused a domino affect that heavily plunged the whole world into a long depression.