Question

Why is trade a good thing if some people lose?

Short answer

Because the overall benefit would be greater

Step-by-step solution

Step 1. Introduction

International trade refers to the exchange of goods, services and resources accross international borders among different countries.

Step 2. Explanation

Trade is generally beneficial for all participants as the countries are able to benefit from their specialization and comparative advantage. The consumers benefit from wide variety of choices and producers benefit from higher profits. But some industries that are not mature enough to handle foreign competition might get hurt. Similarly, not all products are good for consumers.

Despite some participants getting hurt, trade can still be a good thing because the overall benefits from trade can be greater. By increasign competition in the market, trade imporves thequality of products. With better quality products and more choices, the standard of living improves. It contributes to long-term economic growth.