Custom Search

Friday, June 12, 2009

Disadvantages of international trade

Althou the above mentioned advantagesof foreign trade, they are counterbalanced, to some extent, by disadvantages such as: a) dependency: foreign trade makes a country IS ECONOMY seriously dependent upon other countries . if, due to war or any other causes (e.g. laour strikes ), goods cannot move freely to and from the country, it will face a critical situation. b) exhaustion of resources: foreign trade may lead to exhaustion (or depletion) essential materials of country, which cannot replaced. this could be at the expense of the future generations.c) adverse consumption habits: foreign trade may adversely affect the consumption habits of a country through the importation of harmful goods, such as opium, sexy magazines and movie films. Moreover, the domestic consumers will accustom to cheap imports, and oppose any import substitution policy associated with higher prices.

No comments: