Enhancement and

Drawbacks in international
trade Due to Globalization.

Globalization has greatly enhanced international trade by facilitating cross-

border commerce, fostering global supply chains, and enabling cultural
exchange. However, it also poses several challenges that need to be addressed.

Saad Ahmed
BS-7th Development Economics
04092013109
The Benefits of International Trade
Economic Growth
International trade encourages countries to
specialize in producing goods and services in
which they have a comparative advantage, leading
to increased productivity and economic growth.
Access to Resources
International trade allows countries to access
resources, such as raw materials and energy,
which they may not have domestically.
Increased Competition
Competition promotes innovation, reduces costs,
and offers consumers greater choices and higher
quality products.
Investment Opportunities
International trade creates investment
opportunities, allowing companies to expand their
businesses, access new markets, and establish new
partnerships.
Challenges of International Trade

Language and Trade Barriers Political Instability Currency

Cultural Fluctuations
Trade barriers, such as Political instability, such
Differences
tariffs, quotas, and as civil wars or regime Currency fluctuations
Cultural differences and regulations, can limit changes, can disrupt can impact the cost and
language barriers can market access and supply chains, increase profitability of
make it difficult to increase the cost of risks for investors, and international trade
communicate doing business. discourage trade. transactions, especially
effectively and develop for importers and
relationships with exporters.
foreign partners.
Impact on Economies
Job Creation
International trade can create
job opportunities, particularly in
sectors that have a comparative
advantage.
Inflation and Deflation
International trade can affect
inflation and deflation rates,
depending on the demand and
supply of goods and services.
Fiscal and Monetary
Policy
International trade can
influence fiscal and monetary
policy, as governments may
have to adjust their policies to
maintain economic stability.
Technological Advancements
Automation in
Manufacturing
Advancements in robotics and
automation have transformed
manufacturing, allowing for
greater production efficiency and
cost savings.
E-commerce Platforms
E-commerce platforms have made
it easier for small and medium-
sized enterprises to sell goods and
services online, tapping into
global markets.
Cloud Computing
Cloud computing enables
businesses to access computing
resources and data storage over
the internet, reducing costs and
facilitating global collaboration.
Cultural Exchange
1 Food
International trade allows
access to different cuisines,
ingredients, and flavors,
providing an opportunity to
explore and appreciate
different cultures.
2 Arts and
Entertainment
International trade
promotes the exchange of
artistic and cultural
products, such as literature,
music, films, and fashion.
3 Education
International trade
facilitates student
exchanges and academic
collaborations, providing
opportunities for cross-
cultural learning and
research.
Policy Implications
Trade Agreements
Trade agreements establish the terms and conditions of international trade, addressing
issues such as tariffs, quotas, and intellectual property rights.

Investment Protection
Investment protection agreements provide legal protections for foreign investors,
such as fair and equitable treatment and compensation for expropriation.

Environmental and Labor Standards

International agreements aim to promote environmental and labor standards in
international trade, ensuring that trade is fair and sustainable.