ADVANTAGES OF INTERNATIONAL TRADE - Skyline E-learning site

ADVANTAGES OF INTERNATIONAL TRADE

Source of Revenue: International trade is a source of revenue for nations of the world. Nigeria derives 90% of its
revenue from the sale of crude oil to other countries. Taxes can also be imposed on exported and imported
goods.

Promotion of economic development: International trade helps countries to gain technical knowledge which accelerates economic developments e.g. farmers in Nigeria can now import tractors,
harvesters, etc. practice large scale farming.

Provision of employment opportunities: As a result of international trade contacts, foreign investors can

establish firms in sister countries which will create employment opportunities for its citizens.

It leads to international specialization: Through international trade, countries will specialize in the

production of goods for which they have comparative advantage over others. This will make prices of such goods cheaper.

Increase in world output: countries specialize in goods and services in which they comparative advantage and where utilization of resources is made, world output will increase.
Availability of variety of goods: Through foreign trade, wide variety of goods are made available. West countries can import cars, electronics, shoes and equipment etc. from countries. New products are for markets.

Acquisition of skills and ideas: Through international trade, new ideas, skills and techniques can be acquired to improve the quality of goods services.
It fosters closer international relationship: Foreign trade brings about prospects for peace in the world. There is familiarity, understanding, and harmony in the world when from different races trade together.
Increase in standard of living: there is exchange of different goods services among countries, the standard of living increases. People can get what they need which they cannot ordinarily produce.

Equitable distribution of national resources: Natural resources found in one country of the world through foreign trade.

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