Question

Enumerate the disadvantages of international trade

Answer 1

1. Economic Dependence: International trade is more likely to make the country too much dependent on imports from foreign countries. The former may not take any efforts to produce goods and services indigenously to substitute imported goods and thus becoming self-sufficient.

2. Inhibition of Growth of Home Industries: International business may discourage the growth of indigenous industry. Unrestricted imports and severe competition from foreign companies may ruin the home industries altogether.

3. Import of Harmful Goods: International business may lead to import of luxurious goods, spurious goods, dangerous goods, etc. It may harm the well–being of people.

4. Shortage of Essential Goods in Home Country: The export of essential commodities out of the greed of earning more foreign exchange may result in absolute shortage of these goods at home country and people may have to buy these commodities at exorbitant price in the local market.

5. Misuse of Natural Resources: Excessive export of scarce natural resources to various countries across the world may lead to faster depletion of the resources in the exporting countries.

6. Political Exploitation: International business may create economic dependence among the countries which may threaten their political independence.

7. Rivalry among the Nations: Acute competition for exports may lead to rivalry among the nations. This may lead to conflict of interest among the countries and end up in wars among them.

8. Invasion of Culture: International business may result in invasion of country’s culture. Younger generation is more likely to imitate foreign culture and buy goods and services beyond their means to gain acceptance in the affluent section of society. This will ruin the conventional lifestyle of the society.