International trade in a simplified argument is necessary
to boost prosperity because it allows nations to use their absolute and comparative
advantages to the maximum extent.
Industries of all nations
can export the products and services that they can deliver at the lowest cost and for
the highest price and can import products and services that other nations can deliver to
them at the lowest price. This benefits all the parties involved in
trade.
International trade forces industries of all nations
to become as efficient as they can, thereby reducing costs. This coupled with the fact
that they have access to markets where their products can give them the highest price
ensures very high profitability.
The increase in
profitability would imply an increase in prosperity.
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