International Trade is inevitable in our modern time. Globalization is not only a buzzword but a reality. I believe that instead of working on ways to protect a country’s industries from globalization and international trade, governments should instead welcome globalization by removing trade restrictions.
In David Ricardo’s Principles of Political Economy and Taxation, the English economist laid bare the concept of comparative advantage. Comparative Advantage states that even if a nation is better at producing all its needed commodities compared to another nation, both nations benefit if both nations only produce the commodity they are best at producing. Comparative advantage forms the basis of a kind of “specialization” between nations, stressing that the manufacturing equation does not simply boil down to simple costs but also to the opportunity costs of producing one product over another. With international trade, each nation can concentrate on producing the product it is best at and simply import everything else – a scenario which Ricardo tells us will benefit all nations.
Another benefit to International Trade is its ability to facilitate the exchange of cultures. Not all products are commodities. Trade allows American cinema to arrive in China, for Indian textiles to be bought in Paris, for Australians to have a taste of Philippine rice cakes. With open ports, countries will also open their hearts and minds to other peoples. This will benefit all nations as the interaction with other cultures will hopefully bolster our understanding of one another.
Lastly, there is simply a need for international trade. Singapore doesn’t have freshwater supplies. The US cannot be self sustaining in oil at this moment. Dubai doesn’t have a Mercedes-Benz plant. There are simply items which countries have no other recourse but to import. This may be due to scarcity (like famines and droughts) or simple lack of natural resources. Without international trade, these countries may have to endure a lower standard of living as they will have to bear out their lack of natural resources.