International trade can provide financial resources to developing countries.
International trade is trade that transcends international borders. This is in direct contrast to domestic trade, which is trade that takes place within a territory or local market. International trade has become possible due to advances in technology that make it easier to communicate and coordinate the transfer of goods and services between territories. The impact of international trade can be seen in many areas, including the economy, jobs, outsourcing and unfair labor practices.
Middle Eastern counties depend on revenue from the international trade in crude oil and other natural resources.
One impact of international trade is its effect on the economy of nations involved in the trade. This effect is felt by both less developed and more developed nations. More developed countries benefit from purchasing raw materials and finished products from less developed countries. Least developed countries gain by obtaining much-needed financial resources from trade. For example, some developing countries in Africa and the Middle East have some natural resources like crude oil, metals and gemstones that they can sell to other countries in exchange for financial resources. Indeed, the economies of some of these countries depend on financial resources. Most developed countries that do not have resources such as crude oil are largely dependent on supplies from these nations.
Some developing countries in Africa have natural resources that can be sold to obtain the necessary financial resources.
International trade also has a strong effect on jobs in more developed countries. Most companies now engage in outsourcing, which is a direct result of international trade. These companies prefer to hire workers from other countries who can do the same or more work than their local employees at a fraction of the cost. This reduces the number of jobs available to the local workforce. It can also lead to unfavorable competition where local workers are forced to compete with international workers from countries with lower living standards who are willing to do the same work for much less than the minimum wage.
International trade offers an opportunity to exchange culture and technology.
This specific impact of international trade raises fears that some unscrupulous trading partners could exploit cheap labor in ways that harm workers in poor countries. For example, some Western companies move their companies to some Asian countries with lax labor laws, where they tend to exploit the local workforce, paying them very little compensation for hard work. Some concerns also arise about the potential for using less labor in the manufacturing sector, especially in the apparel and toy sectors. This is an undesirable impact of international trade.