Evaluation Essay Sample on International Trade

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What Are the Advantages and Disadvantages of International Trade?

Advantages of International Trade

According to (WHO) the main advantage of importing products in America is an increase in the choice of markets. Following the importation of products in the U.S, most local markets can improve their products by providing consumers with goods that are either not available locally or products that can act as competitors in the market competition.

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With the increase in competition due to the imported products, the local producers are frequently forced to lower their product prices so as to remain in the competition. The American consumers benefit directly from the low prices/costs, while the manufacturers benefit from creating new competing ways, for example: improving the process of production to lower the production costs.

Another advantage is that the process of importing certain products such as unfinished goods or raw materials can enable local productivity by allowing different products to be produced in different great varieties.

Raw materials or unfinished goods that are not available locally can enable the production of new products for both local trade and exports.

Disadvantages of International Trade

It is blamed as the main cause of loss of jobs for the American citizens because most companies will close down due to the market continuously flooding with cheap imported goods.

Continuous importation of goods and services could lead to the erosion of national economies as well as domestic markets most especially when there is the occurrence of a trade deficit. A case of higher imports than exports.

Due to the acceptance of social values, there can be a conflict in the domestic values due to increased importing of goods.

Impact of Tariffs on International Trade

One of the advantages of import tariffs and outright bans on the importation of certain goods into U.S. markets is that it prevents the loss of jobs in many businesses in the U.S, this can only be done by imposing high tariffs on the imported goods hence discouraging trade between the U.S and the overseas company. While its disadvantage is that even though it prevents job loss to the local industries it leads to job loss to the overseas industry through the imposition of high tariffs that discourage market competition, leading to a decrease in value of the product quality.

Tariffs and bans are often imposed so as to discourage foreign competition this acts as an advantage to the local markets. Even though the tariffs lead to retaliation they allow the local producer to hire more workers to sell their products. As a disadvantage, it leads to trade wars because their trading export counterparts may impose their own tariffs on the imported product. This situation may raise the cost of conducting business with the exporters thus compromising the quality of products and services offered.

The Pros and Cons of Trade Agreements

Pros of Trade Agreements

NAFTA being a trade agreement has allowed Mexico, Canada, and California to take very good advantage of niches and make maximum specialization in those areas. For instance, Canada produces nickel and exports it as raw metal to California where it’s transformed into a high-tech element that is sent to Mexico and transformed into a finished product.

FTAA would have expanded trade through the elimination of tariffs thus improving the market access for companies, and reducing barriers to trade.

TAFTA would not only boost trade in Europe and United States it would also boost trade in many other countries across the world.

NAFTA is one of the agreements that has allowed most companies in the United States to make use of its comparative advantage.

FTAA would have allowed minor companies in smaller countries to compete with the companies in Brazil and Mexico by giving them market access.

TAFTA boosts trade during a time of economic crisis, this means that there will be more jobs, growth in production as well as business opportunities.

International Trade Agreements Cons

TAFTA will allow big and greedy companies to take full advantage of the investment and trade side of the agreement, this allows them to manipulate the agreement by ensuring economic, financial, and political power is in their very own hands.

NAFTA can be the cause of excessive pollutions because factories and delivery tracks will be lush.

FTAA had a poor and unfair competitive advantage for instance the local farmers who could not compete with the market flooded with cheap products could be forced to take jobs in the factories that have just moved to their countries.

Most parties feel the way they do about these agreements were created to solve problems but in the process of solving the other problems came up as well.

Impact of Cultural Differences on International Trade

International Trade: Benefits of Understanding and Accepting Cultural Difference

It gives America and other trade agreement countries the opportunity to experience different products outside what they are normally accustomed to.

It leads to an increase in adaptability for example employees from diverse areas can bring about individual experiences as well as talents that can be used in fluctuating markets and areas of customers’ demands.

Limitations of International Trade

The trade agreements imposed by America and other countries maintain that cultural goods and services offered were dealt with as any other commercial products, these reflect America’s commodity conception. FTA is an example of those agreements.

Employees in the U.S face threats like pay cut demands from employers who threaten to export their jobs. A culture of fear has been created by middle-class employees who have very little leverage in this global trade.

International Trade: Importance of Understanding Cultural Difference

One of the importance of understanding and accepting cultural differences is that it leads to better marketing between different countries with different cultures.

Effective and efficient communication is the key element of a successful organization, so when one appreciates a different culture he/she maintains both a peaceful and a professional environment in business.


I would recommend America expand her media diet by including other cultures in the media programs.

I would also recommend America as a country to invite other countries with different cultures to make many more trade negotiations.


Alaba, O., Adenikinju, A., & Collier, P. (2008). Trade Policy: Prospects and Challenges. In Economic Policy Options for a Prosperous Nigeria (pp. 147-166). Palgrave Macmillan UK.

Gantz, D. A. (2008). Regional trade agreements: law, policy, and practice. Carolina Academic Pr.

Olsen, J. E., Biswas, A., & Granzin, K. L. (1993). Influencing consumers selection of domestic versus imported products: implications for marketing based on a model of helping behavior. Journal of the Academy of Marketing Science, 21(4), 307-321.

Trompenaars, F., & Hampden-Turner, C. (2011). Riding the waves of culture: Understanding diversity in global business. Nicholas Brealey Publishing.

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