What Are the Advantages and Disadvantages of International Trade?

International trade lowers the cost of products through competitive advantages, but it can lead to harm for communities and nations. Workers in developed nations are sometimes replaced by counterpart in developing nations. Work conditions in developing nations can be exploitative.

Different nations have competitive advantages over others. Brazil, Cuba and other nations have conditions that are great for growing sugar, and exporting sugar allows everyone to pay less for it than if all sugar was grown locally. Similarly, other nations have the infrastructure needed to develop faster computer parts, and these nations are able to deliver better products people around the world can use.

However, one of the competitive advantages held by developing nations is low labor costs. Workers in developed nations who need jobs that pay better than their counterparts in other parts of the world are sometimes replaced by foreign workers. This can shrink the middle class in developed nations and cause hardships for people no longer able to find work.

Many manufacturing jobs have moved to developing nations as well, and many of their governments do not enforce strong labor laws. As a result, children are sometimes forced to work, and employers might demand more of their workers than most find ethically acceptable.