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What Are the Disadvantages of International Trade?

International trade is often linked to poor working conditions for third world countries.
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  • Written By: Felicia Dye
  • Edited By: Melissa Wiley
  • Last Modified Date: 09 April 2014
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Disadvantages of international trade span from negative social effects to adverse environmental ramifications. Sometimes the welfare of people is ignored or jeopardized for the sake of profit. Other problems associated with the exchange of goods and services between nations include possible risky dependence on foreign nations and domestic job losses.

There are social disadvantages of international trade. Although exposure to other cultures can be a benefit, it can also be harmful. The types of goods and services that flow from developed nations to emerging nations can have rapid and significant negative effects on their cultures. For example, certain music or movies from a nation such as the United States cannot be sold in their original form, and sometimes not at all, in some other nations where culture or religion are prioritized because of the changes in mentality and behavior that they may incite.

Another of the disadvantages of international trade is that the welfare of the people in nations that produce goods and services is sometimes ignored for the sake of profits. Those profits generally benefit only a minority, and that minority may not even be citizens of the nation that they are exploiting. It is common in third world countries to find that people are required to work under unfair circumstances, which may include being paid low wages or subjected to unhealthy occupational environments.

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Even if there is not an issue with adverse treatment, it is still common to find that goods and services can be produced more cheaply in emerging countries. When these countries are allowed to access large markets, it can result in job losses and the collapse of industries in the developed countries because they are no longer able to be competitive.

International trade can also result in destruction and exhaustion of natural resources. Some countries are so desperate for revenue or so profit-driven that they will allow their natural resources to be over-exploited, which can create serious problems in the future. This is often exacerbated by the fact that the entities who are engaged in the task of extracting those resources or producing goods from them may do so in a way that creates substantial environmental damage. In some cases, there are limited or no resources to address these issues afterward.

Those nations with small economies are often heavily dependent on their trading partners in developed nations. It is not uncommon to find that those developed nations will attempt to exploit these relationships. They do so by using their economic power to influence political decisions that are not directly related to their trade activities. Furthermore, disadvantages of international trade result from the reliance that countries have on one another. When one nation knows that it is the source of all or a significant portion of materials or services for another nation, the supplying nation can impose embargoes or other difficult trade restrictions if differences arise or simply for financial gain.

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Discuss this Article

literally45
Post 3

I don't deny that international trade has disadvantages. But without trade, the global economy would not work. No country is self-sufficient, so everyone needs to buy some goods from other countries.

turquoise
Post 2

I think international trade is most disadvantageous for workers. Almost everyone has heard about child workers in developing countries working for merely pennies. It's advantageous for us to buy from these countries because the products are cheaper and more Americans can afford to buy them. But we enjoy this advantage at the expense of those workers.

If worker's rights were implemented in those countries, those products would not be cheap anymore and there would be no point of buying them. The only reason they're cheap is because the workers get paid zilch and work unbelievable hours.

And when we prefer to import those cheaper goods from another country rather than making it here in America, Americans are losing jobs. It's a loss for both sides the way I see it.

SteamLouis
Post 1

Another disadvantage of international trade is that sometimes, goods that come from other countries may not be up to standards of safety and quality. Even though there are different mechanisms in place to check these products, something always manages to sneak in.

For example, supplements and food items from other countries can be tainted with bacteria. It has happened many times in the past. When doctors find out the source of the problem, the FDA will take the product off the shelves. But until that happens, many people and even animals get sick.

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