Comparative Advantages in Global Trade: Sources, Benefits, and Examples

GLOBAL TRADE
Discussion on comparative advantages

INTRODUCTION
 In the current international trade, most of the
countries involved in trading process are striving
to gain comparative advantages.
 Comparative advantages refer to the degree to
which a particular country is having the upper
hand in producing a particular goods or
commodity.
 Countries in the current global business scenario
are trying to gain and retain comparative
advantages to stay ahead in the global trading
process.

SOURCES OF GAINING COMPARATIVE
ADVANTAGES FOR COUNTRIES
 Lower cost of human resources
 The more will be the availability of the human
resources, the lower will be the cost.
 The countries with having larger access and
supply to human resources will be able to initiate
the production with lower cost of human
resources.

SOURCES OF GAINING
COMPARATIVE ADVANTAGES FOR
COUNTRIES
 Lower cost of strategic resources
 More access to natural resources will help in
having lower cost of the resources.
 Geographical locations of the countries also helps
in having comparative advantages.