Why is Trading with different countries so important and why did the US force japan to trade internationally even if they didn’t want to ?
In: Economics
>Why is trading with different countries so important
2 main reasons come to mind:
1. Efficiency. Production of either higher quantity or quality means either better price or quality goods. No single country does everything best, some have better access to raw materials, some are better at cheap manufacturing, some are better at high quality manufacturing, etc.
2. International relations. Countries you have an active positive relation with are more likely to show you support on the world stage. This could be as simple as vocal support or as complex as military cooperation. Much as in the market, greater diversity insulates you from volatility. If you have wide positive international relations and one partner’s stability tanks, you have many others to fall back on. You’re also more likely not to make unpopular international decisions because it reflects poorly on your partners.
Point 2 is relevant to the Japan part of your question. For a more stable world you want a broadly interconnected web that (at least in theory) will push back on you for misbehaviour.
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