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Benefits for International Specialisation: International trade enables a country to enjoy the advantages of international specialisation according to comparative costs.
Every country specialises and exports those commodities which it can produce cheaper in exchange for what others can provide at a lower cost. When a country specialises according to its comparative advantage, it gains an increase in real income and consequent rise in the standard of living of its people J.
Therefore, international trade by enabling better and more efficient utilisation of the resources of a country increases its real national income and hence has a growth-promoting effect. Widening of Market and Raising Productivity: It is argued that the productivity gains arising out of extension of market is a consequence of foreign trade.
Improvements in productivity result from greater division of labour, a higher degree of mechanisation and greater possibility of innovation.
It is said that foreign trade, by widening the extent of the market and the scope of the division of labour, permits a greater use of machinery, stimulates innovations, overcomes technical indivisibilities, raises the productivity of labour, and generally enables the trading country to enjoy increasing returns and economic development.
Mill has categorised them as indirect dynamic benefits arising out of foreign trade. Thus foreign trade, by extending the size of the market, exercises a dynamic influence on the economy. In turn, it helps to raise the production at higher trade. As a result, country enjoys the benefits of external and internal economies of scale.
Helpful for High Growth Potential: Foreign trade can also help in the development of a country enabling it to exchange domestic goods saving low growth potential for foreign goods with high growth potential.
Hicks emphasising this growth promoting aspect of international trade observes that trade offers an opportunity for the exchange of goods with less growth potential for goods with more growth potential, thereby quickening the progress that results from a given effort on the saving sides.
It provides an opportunity for importing capital goods and materials required for development purposes. The import of machinery, transport equipment, vehicles, power generation equipment, road building machinery, medicines, chemicals and other goods with high growth potential provides greater benefits to the developing countries.
Educative Effect of Trade: It is maintained that international trade can serve as a vehicle for the dissemination of technological knowledge.
A deficiency of knowledge can be a biggest handicap in the development of a country and this deficiency can be effectively removed through contact with more advanced economies i. The technical know-how and skills is an indispensable source of technological progress, and the importation of ideas in general is a potent stimulus to development.The International Trade division of the Georgia Department of Economic Development (GDEcD) provides Georgia exporters with global insight and connections to grow their international business opportunities.
International Trade and Development Picture Credit: John Hogg/World Bank Capitalist economic theory holds that a completely liberalized global market is the most efficient way to foster growth, because each country specializes in producing the goods and services in which it has a comparative advantage.
A reappraisal of strategic trade policies with the endogenous mode of competition under vertical structures Choi et al. Published online: 18 Jun The Office of Economic Development & International Trade assists new and existing businesses of every size starting, expanding or relocating in Colorado.
International trade contributes significantly to Virginia’s economy though jobs, income, and taxes. The estimated direct, indirect, and induced economic impact of Virginia’s direct imports in represented. The Senate Economic Development & International Trade Committee considers issues relating to economic development and economic development incentives, international trade, and tourism.
(Please note: This general description should not be considered the definitive listing of issues considered by this committee.).