from International Trade
International trade increases dependency of countries on other countries. Countries that import essential commodities from other nations become dependent on the exporting nations for the fulfilment of the need of their people of that commodity. This happens because the domestic producers are often de-motivated from producing imported commodities of identical attributes that are available at lower prices in the market. These producers move on to production of other commodities and reduce the domestic supply of these commodities. This also limits growth of industries in the importing country as incentives that a producer derives from operating in a particular industry may be minimized with the introduction of import substitutes, which may be of superior quality and utility. Often, countries import essential commodities that cannot be produced domestically or can only be produced in small quantities which do not meet the demand for them. For example, most countries around the world import oil from OPEC, Venezuela etc. as their domestic supplies don’t match up to their domestic produce. This makes them dependent on these oil exporting countries for a commodity as basic as oil. If these countries stop exporting oil, most of the world would come to a standstill in a matter of weeks as the worldwide demand can only be met by their supply. On the flip side, if producers of a country find comparative advantage in international trade of a particular commodity, they start focussing on exports of that particular commodity and can sometimes manage to have an upper hand over some country, which they may use to their benefit. Another aspect of this is that producers, who focus on exports, increase the domestic prices in line with the world prices, which essentially reduces the purchasing power of consumers as they have to shell out more cash for the purchase of the commodity in concern. The fact is that very high dependence on foreign imports can often lead the trading countries to become susceptible to the economic, social and political environmental variables of their counterparts.
จากการค้าระหว่างประเทศInternational trade increases dependency of countries on other countries. Countries that import essential commodities from other nations become dependent on the exporting nations for the fulfilment of the need of their people of that commodity. This happens because the domestic producers are often de-motivated from producing imported commodities of identical attributes that are available at lower prices in the market. These producers move on to production of other commodities and reduce the domestic supply of these commodities. This also limits growth of industries in the importing country as incentives that a producer derives from operating in a particular industry may be minimized with the introduction of import substitutes, which may be of superior quality and utility. Often, countries import essential commodities that cannot be produced domestically or can only be produced in small quantities which do not meet the demand for them. For example, most countries around the world import oil from OPEC, Venezuela etc. as their domestic supplies don’t match up to their domestic produce. This makes them dependent on these oil exporting countries for a commodity as basic as oil. If these countries stop exporting oil, most of the world would come to a standstill in a matter of weeks as the worldwide demand can only be met by their supply. On the flip side, if producers of a country find comparative advantage in international trade of a particular commodity, they start focussing on exports of that particular commodity and can sometimes manage to have an upper hand over some country, which they may use to their benefit. Another aspect of this is that producers, who focus on exports, increase the domestic prices in line with the world prices, which essentially reduces the purchasing power of consumers as they have to shell out more cash for the purchase of the commodity in concern. The fact is that very high dependence on foreign imports can often lead the trading countries to become susceptible to the economic, social and political environmental variables of their counterparts.
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