Question

Free trade increases prosperity of Americans and the citizens of participating nations by allowing consumers to buy more, better quality products at lower costs. It drives economic growth,enhanced efficiency,increased innovation and the greater fairness that accompanies a rules based system.The main advantages of international trade is free trade agreements are designed to increase trade between two countries. Increased international trade has six advantages increased economic growth

Answer 1

Advantages of international trade:

1) The market size increase as the firms will be able to enter new markets, thus making them less dependent on existing market.

2) Production of goods and services increases due to trade as the producer got opportunity to export them between new countries due to these international trade.

3) Due to international trade labour will get work and their standard of living also increases. Thus international trade helps to reduce unemployment rate.

4) There will be exchange of technology and resources between countries which help countries to grow economically and technologically.

5) Due to international trade countries will be to provide goods at low cost in which they are specialised which helps them to have advantage in production of that good or service in the market at low cost.

6) Foriegn direct investment gets increased due to international trade thus helping both the countries.

7) Cost effectiveness can be seen in production of goods and services which stabilize the price level.

8) Firms can increase their thus leading them to earn more profits and which they use to expand their business. Thus economy also booms.