Q.Discuss the benefits of International Trade.

International trade - the exchange of goods and services between countries - benefits nations through efficient use of resources, wider markets, foreign-exchange earnings, availability of scarce goods, specialisation, employment, economic growth and international cooperation.

Meaning

International trade is the buying and selling of goods and services between two or more countries. It consists of imports, exports and entrepot (re-export) trade.

Benefits of International Trade

1. Efficient use of resources - Each country produces what it can make best and cheapest, and trades for the rest.
2. Availability of scarce goods - Countries obtain goods and raw materials they cannot produce at home.
3. Wider market and large-scale production - Access to foreign markets encourages mass production and economies of scale.
4. Foreign-exchange earnings - Exports earn valuable foreign currency needed to pay for imports.
5. Higher standard of living - A wider variety of quality goods at reasonable prices improves people's welfare.
6. Specialisation and division of labour - Nations specialise according to their comparative advantage.
7. Employment generation - Export industries and allied services create jobs. …