Advantages of Importing:
Importing raw materials and goods is one of the paths of increasing the profit margins. There are number of benefits in importing the goods, such as high quality, low prices, and benefits related to the international trade. An importer can have the comparative advantage which means lower prices (Jones, 2006). Also the importer can have the much cheaper products from the foreign market due to low labor cost, low taxes etc. in terms of quality, the importer can have the higher quality goods and produce the finished goods with high quality and extend the business profit margins. In some countries, government provides the support to the importer for developing the trade relations (Nelson and Winter, 2007).
Government provides the information of the manufacturers and producers in the foreign country so that the importer can purchase the high quality and low price goods. Also due to the government involvement reduces the transaction risk. An importer can access to the regionally exclusive resources and cheap labor for producing the goods. These resources are required in the manufacturing process that have specialized skills and can be sound in certain countries. For example in electronic items, Japanese people are highly efficient and manufacturer in UK use the labor from Japanese market for producing goods. The importing of resources includes everything starting from labor to technology (Fortanier, 2008).
Disadvantages of Importing:
There are many governments and economists who believe that the importing goods have numerous disadvantages. For example importing of goods could lead the erosion of the domestic markets and national economies specifically when there is trade deficit occurrence i.e. the import is higher than the export. Some of the goods like cars; appliances lead a higher level of domestic automobile and electronic markets and also loss of jobs in the respective markets (Hennart, 2007).
Some other problems can also be increased due to import of goods such as conflict in the domestic values due to the acceptance of social values. The domestic industries can also be crippled due to the import of the countries where the wages are low and the domestic industries are unable to compete since they cannot lower down their prices of goods than the cost of goods and also they have the obligation to the worker union (Hertner and Jones, 2007).
Free Trade Concept:
The concept of free trade was introduced in the system to benefit the country and improving the condition of poor by providing them high quality and cheaper products. However as an economist, in my opinion free trade is erosion the domestic players for example if UK government lower down the import duty on sugar then the demand for the imported sugar will increase and domestic player will not be able to compete with the foreign player (Johanson and Wiedersheim-Paul, 2008). On the other hand the economic category argues that free trade promote the environmental degradation, supporting the child labor, income inequality and wage labor, slavery, harming the national defense, enforcement of cultural change and accentuating the poverty in the country.
The economists also argued that the importing goods under free trade are opposed by the domestic industries due to rise in competition in terms of product quality and cheaper prices (Nelson and Winter, 2007). A maximum exploitation of workers due to the free trade is also opposed by the socialists. Free trade generally do not reduce the poverty or improve the condition of working class in the country but frequently make them more poor. It also supports the colonialism and imperialism in the country. On the other hand I believe that in free trade consumer could gain more than the industrialists and the domestic producers are more likely to mobilize their products without lifting the tariffs (Jones, 2006).
Conclusion and Suggestions:
The competitive business environment enforces the businesses in both the international and domestic markets to retain their business and remain competitive. However depending on the need and potential of the business, it is essential to understand whether the company should indulge into the export or import activity (Gupta and Govindarajan, 2008). It is recommended to the businesses specially the medium and small companies to extend their business potential at domestic market first and then extend into the international market collaboration, joint venture or business partnership. Prosperity in the country cannot be achieved through protectionism since it increases only the poverty and also do not protect the domestic industries or jobs but harm the export business and industries which has belief on imports (Hennart, 2007).