Theory of comparative advantage

With the existence of such policies, it is possible to kill the growth of the trading partner’s infant industries since it shall be considered cheaper importing the goods rather than producing the same goods (Rassekh, 2015). This can obviously result in increased unemployment rates since some industries would need to close down over the increased competition that would result in lower revenues. Such policies can also result in the importation of sub-standard goods by the competitor trading company’s which may be considered substitutes for the main products hence would result in dumping in the long run. In most cases, adoption of the substitute goods always results in the collapse of the main product which would have been more effective (Chacholiades, 2017).