Question

Why is trade diversification necessary to promote trade of the country?​

Answer 1

Answer:

Increased Economic Resources

Developing countries can benefit from free trade by increasing their amount of or access to economic resources. Nations usually have limited economic resources. ... Free trade agreements ensure small nations can obtain the economic resources needed to produce consumer goods or service

Answer 2

Answer:

Diversification helps countries to hedge against adverse terms of trade shocks by stabilizing export revenues. It enables them to direct positive terms of trade shocks into growth, knowledge spillovers and increasing returns to scale.