The following points highlight the top four advantages of international trade. The advantages are: 1. Variety 2. Efficiency 3. Specialisation 4. Interdependence.

Advantage # 1. Variety:

In the absence of international trade, many countries would have to go without some products. For example, countries with a temperate climate would have to do without certain fruits, cotton and rice; others would be unable to use minerals which are not domestically available. Thus international trade enables each country to enjoy a greater variety of products.

Advantage # 2. Efficiency:

Access to an enlarged international market enables indus­tries to raise productivity of resources through economies of scale. Large- scale production results in economies in many industries and selling abroad as well as at home extends the market and so makes mass production possible.

Advantage # 3. Specialisation:

Foreign trade enables each country to specialise in the production of those commodities for which it is most fitted by natural conditions – climate, soil, etc. In addition, the people of the world differ in talents and abilities.


The differences may be in skills which have been acquired by tradition (e.g., wine-making in certain parts of France, Italy and Portugal or those taught through education and training engineering in Japan). Thus, foreign trade permits a country to concentrate on producing those goods and services for which its resources are most suited and at the same time, to satisfy its other wants by importing.

Advantage # 4. Interdependence:

International trade makes the countries of the world interdependent. A country depends upon others (a) for supplying its deficiencies in goods and services, and (b) for markets for its own products. Trade may lead to an exchange of knowledge and culture between coun­tries. This may reduce the possibility of war.

Despite these advantages, many countries have chosen to protect their industries There can be some economic justification for this but it all countries adopt the policy there will follow a massive decline in trade which will threaten jobs and living standards across the world.