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Advantages of International Trade

(i) Provision of Employment: It offers opportunities for employment in such areas as insurance, clearing and forwarding services, shipping, distribution and general administrative services. Besides, many people are employed in the production of exports and imports commodities.

(ii) Increase in Standard of Living: Since international trade widens the market for goods and services, it increases standard of living through the consumption of greater quantity and variety of goods and services.

(iii) Acceleration of Economic Development: International trade helps to speed up economic and social development through specialisation.

(iv) Source of Revenue to Government: Most governments levy import duties on imported goods such as liquor to raise more revenue. The government also raises revenue in the form of excise duties on locally produced export goods.

(v) Creates International Competition: Foreign competition is introduced through trade. There is increased research by countries on the most effective production techniques that are capable of producing quality goods for the world market.

(vi) Wider Market: A country’s market is expanded by having access to other countries’ markets.

(vii) Source of Foreign Exchange: Through the exportation of goods and services, countries are able to earn foreign exchange.

(viii) Promotes International Friendship: international trade provides a vital link among countries that trade together. This promotes international friendship among those countries that are involved in trade.

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