What are the limitations of comparative advantage?

Limitations of comparative advantage:

International trade needs wide specialisation. This can have drawbacks as given below:

• Strategic issues: countries turn into dependent on imports of necessaries from other countries. A dispute within one country can halt production into other

• Foreign producers may engage in dumping that is selling output below average cost like part of a predatory pricing contribution pricing strategy. These practices are against WTO rules

• Infant industries argument: Sunrise industries may not be capable to become established when faced with competitors through foreign companies along with lower costs because of greater economies of scale.

• A country might experience the drawback of overspecialisation, involving diseconomies of scale,

• Vulnerability to unexpected changes into demand. All the products include a life cycle. Where a country has specialised within a product consumers no longer desire, structural and unemployment follows.