International trade helps generate more employment through the establishment of newer industries to cater to the demands of various countries. If the productive efficiency of the home country increases, it will be to the advantage of the foreign country (and vice versa), for it will lead to more favorable terms of trade for the latter. Exports create jobs and boost economic growth, as well as give domestic companies more experience in producing for foreign markets. 1. consumers enjoy increases variety of goods. The Gains from International Trade The total amounts produced of the respective commodities will be indicated by the barred letters, X10, X2. Static Gains from Trade: The static gains from trade are as under: (i) Expansion in Production: International trade based on the principle of comparative cost advantage, according to classical economists, assures the benefits of international specialisation and division of labour.  The gains from international trade are of two types: 1. Gains From International Trade The gains from International trade are to make the participating countries better of than they ECONOMICS Lesson Eight 209 would have otherwise been. It shows that the gains from international trade result from pursuing comparative advantage and producing at a lower opportunity cost. The theory of comparative advantage explains why countries trade: they have different comparative advantages. Research shows that exporters are more productive than companies that focus on domestic trade. The global trade can become one of the major contributors to the reduction of poverty. Another gain from trade comes in the form of an increased product variety. Over time, companies gain a competitive advantage in global trade. More employment could be generated as the market for the countries’ goods widens through trade. [4] Before introducing possibilities for trade into our system, it will Nations with strong international trade have become prosperous and have the power to control the world economy. 5) Consumption at Cheaper Cost: The benefits of international trade have been the major drivers of growth for the last half of the 20th century. Other benefits of international trade. The gain from international trade also depends upon the relative productive efficiency of the country. Free international trade can increase the availability of all goods and services in all the countries that participate in it. Advantages of International Trade . This will help countries to bring-down their unemployment rates. In addition, international trade can make a brooder range of inputs and technology available and thereby increase economic growth. 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