a) What is entrepôt trade? b) State three advantages and three disadvantages of international trade...

Explanation

(a) Entrepôt trade involves the importation of goods from one country and re-exportation of the goods to another country.

(b)(i) Advantages of International Trade:

• International trade widens the market for goods;
• It avoids wastage because countries can dispose off the goods they have in excess;
• It improves the standard of living because countries can enjoy what they cannot produce;
• It creates more jobs as in transporting, selling, manufacturing because of the need to increase production to meet foreign demands;
• It brings about specialization and mass production which in turn results in lower unit cost of the product;
• It generates revenues for the countries involved;
• It fosters international relations;
• It encourages the transfer of technology;
• It promotes economic development.

(ii) Disadvantages of International trade:

• It kills local industries whose products cannot compete with those from developed countries;
• It puts the country into perpetual dependency on foreign goods;
• It leads to dumping;
• It may lead to the importation of harmful goods;
• It creates unemployment in importing countries;
• It leads to unfavourable balance of payment.