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International Trading

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ASSIGNMENT 1 (INTERNATIONAL ECONOMICS)

Q1. The increased international trade in goods and services among countries is one of the many aspects of globalisation. Explain the benefits of international trade.

According to World Trade Centre, there are 10 benefits of International trade which includes (1) the system helps promote peace, (2) Disputes are handled constructively (3) Rules make easier for all, (4) Free trade cuts the costs of living (5) It provides more choice of products and qualities, (6) Trade raises income, (7) Trade stimulates economic growth, (8) The basic principles make life more efficient (9) Government are shielded from lobbying (10) The system encourages gooog government.

(1) The system helps promote peace
According to WTO, Peace is the most fundamental of trading system. It helps trade to flow smoothly, easier for countries dealing with disputes over trade issues, and an outcome of the international confidence and cooperation that the system creates and reinforces.

(2) Disputes are handled constructively
In the trading system, the more trade means more opportunties for disputes to arise. These international trade system is reduced because countries can turn to organzations, in particular the WTO, to settle their trade disputes. For example, around 300 disputes have been brought to WTO since it was set up in 1995. In many cases, countries in dispute always aim to comfort with the agreements.

(3) Rules make easier for all
Smaller countries enjoying more bargaining power and life is simpler for bigger countries.The WTO cannot claim to make all countries equal. But it does reduce some inequalities, giving smaller countries more voice, and at the same time freeing the major powers from the complexity of having to negotiate trade agreements with each of their numerous trading partners.

(4) Free trade cuts the costs of…...

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