On this page, we will discuss three possible problems that could occur because of international trade. The content on this page is relevant for Business Studies Grade 9 and Economic and Management Sciences Grade 9 Subjects.
What is an International Trade?
International trade is an exchange involving a good or service conducted between at least two different countries. The exchanges can be imports or exports/imports and Exports/Imports are the goods and services that are purchased from the rest of the world by a country’s residents, rather than buying domestically.
Three possible problems that could occur because of international trade
- Problem 1: For the producers of certain perishable goods, the vast distances between countries may make it very costly or difficult to access new markets.
- Problem 2: Fluctuating exchange rates or a weak currency may make it risky for local investors to trade internationally.
- Problem 3: Uncontrolled foreign competition (monopolies) and unrestricted imports may undermine local industries, which may threaten jobs or the sustainability of local industries.
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