Following are the disadvantages:
(a) Economic Dependence : Most of underdeveloped and developing countries are totally dependent on the exporting countries for importing the goods and services for their economic development. Too much dependence on exporting countries has serious political and social economic implications.
(b) Dumping of goods : Many exporting countries in order to capture the market in underdeveloped countries, dump their goods at throw away prices. Through such goods’are inferior and have shorter life; they attract customers in importing countries which results in cut throat competition to domestic industries.
© Adverse effect on BOP: Because of relatively more freedom in international trade, the underdeveloped and developing nations are not in a position to compete with developed countries due to lack of competence. Thus, then balance of trade remains negative of long-term basis.
(d) Colonialism : International trade leads to
colonialism in the world, which means the domination of developed countries over dependent underdeveloped countries to fulfil their mean interests.