Disadvantages of International Trade
- Created by: s.waterhouse
- Created on: 12-05-17 11:09
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- Disadvantages of International Trade
- Involves high transport costs
- However, these have been reduced by the development of containerisation
- Currency exchanges can carry costs
- Could result in financial losses
- Costs to firms
- Firms must comply with other countries' legal and technical requirements
- Firms may need to translate documents and advertising material
- Firms will need to perform market research overseas
- Increased globalisation
- Rising world incomes causes rising prices
- Leads to economic dependency on other countries
- Can lead to instability
- Global imbalances in balance of payment accounts
- These balances are unsustainable and call for increased protectionism
- Individual firms can be outcompeted by foreign firms
- Specialisation leads to overrelaiance on certain industries in an economy
- Involves high transport costs
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