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The new trade theory explains intra industry trade, while the traditional trade theory explains inter industry trade; The hypothesis of new trade theory is imperfect competitive market, while the premise of traditional trade theory is perfect competitive market; Traditional trade theories are studied from the perspective of supply, and the new trade theory is also explained from the perspective of demand.

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The new trade theory explains intra industry trade, while the traditional trade theory explains inter industry trade; The hypothesis of new trade theory is imperfect competitive market, while the premise of traditional trade theory is perfect competitive market; Traditional trade theories are studied from the perspective of supply, and the new trade theory is also explained from the perspective of demand.

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Because of the imporance of scale in NTT, countries that are developing may have a more difficult time catching up in certain industries because they lack the ability to produce on a scale that allows them to compete adequately. 

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Because of the imporance of scale in NTT, countries that are developing may have a more difficult time catching up in certain industries because they lack the ability to produce on a scale that allows them to compete adequately. 

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Rich determine the specialization of the poor. In a way that is advantageous for the rich countries. Poor countries are systematically shunted into activities that are less beneficial to them. They are pushed away from more industrial activities. e.g. Latin America

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it will cause monopolies and prejudice the global trade.

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and why is having monopolies or oligopolies bad or a cause for a conflict? can you give some examples? 

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and why is having monopolies or oligopolies bad or a cause for a conflict? can you give some examples? 

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Neoclassical assumes imperfect competition

NTT focuses on increasing returns to scale

NCT countries shouldn’t worry about what area to specialise in and it Wille eventually reflect in comparative advantage.

NTT pushes developing countries into subservient roles

Labor force can’t immigrate from one country to another in NCT but this is possible in NTT

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Neoclassical models predict trade based on productivity or endowment differences.
NTT is explains scale-based, intra-industry trade between similar countries with ambiguous but not uneven welfare effects.NTT also includes NEG. NEG C-P predicts trade based on a love of variety (intraindustry), scale economies and trade costs, with major uneven development resulting.

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The implications of NTT outweigh the theory of comparative advantage. Two countries may have no differences in opportunity cost at some point, but if one specializes in an industry, it gains economies of scale. Also, Countries entering the market early can be a dominant one in the world, because there will be limited competition (monopolistic competition). Thus, poorer or late entry countries may struggle to develop as the EoS has already been enjoyed by developed ones.

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First of all, countries should expand their internal market in order to obtain the corresponding effect of increasing returns to scale，then their export will be competitive.

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having monopolies is bad because there will be price-fixing, less innovation, consumers will not have much choices, and quality of products may be low too

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They can use the market power to increase prices which isn't beneficial for consumers and leads to overall increase of complementary goods?

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Strategic Trade Policy:

The government have to use strategic trade policy by shifting the profits from internationally to the domestic level and in this way, the level of the welfare of the economy can be enhanced.

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Because of increased risk of exploitation and unethcal business practices due to relative power of monopolistic firms or economies. If there are no other competitors, a company or economy has the ability to act without risk of losing business

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ich countries cound take advantage of labor costs and environment

rich countries are determining the speicliazinations of poor countries. it is not determined by H-O hence they are pushed into more industrial activites insetad of developing their own

imporportionate growth between rich and poor countries. for example india and china after 1750 productivity decreased while UK and europe increased in that decade

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Developing countries may struggle to ever develop certain industries because they lag too far behind the economies of scale enjoyed in the developed world,

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Governments could also adopt a trade policy that encourages FDI, allowing for the opportunity to increase infrastructure and capital to build economies of scale

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how can they encourage or push local industries that bring EoS? 

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how can they encourage or push local industries that bring EoS? 

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What will be the consequences if the government chooses the wrong industry? What if the selected industry doesn't bring EoS? 

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What will be the consequences if the government chooses the wrong industry? What if the selected industry doesn't bring EoS? 

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And what are the consequences for countries? if we have big markets in strategic locations, firms and countries will compete to move there first, right? Can you think about historical consequences? 

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And what are the consequences for countries? if we have big markets in strategic locations, firms and countries will compete to move there first, right? Can you think about historical consequences? 

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trade war between china and the US over erected tariffs on Chinese goods

Brexit - conflict over hopes to get better trade deals with other countries than EU

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If the government go for a wrong industry it will result in worst underdeveleopment or monopolisitc competition

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International trade can enable developing countries to participate in more economic activities and trade, and can also improve the national economic level. However,there is also saying that poor locked into perpetual laggard status – Shunted into less productive industrial segments.Hence trade hurts their progress by inhibiting breadth of activity.

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One of the successful example I can think of is Japanese car industry

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Developing countries need to establish the advantages of economies of scale and consciously improve production efficiency in order to survive in the international trade environment.

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If the government chooses the wrong industry, then the country will lag further behind

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government support in long term may also cause inefficiency and reliance

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In order to encourage local industries that bring EoS, governments should specify their national competitive advantages, find new technologies and new ways of doing things through technology and innovation.

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In terms politics, if an industry grows and becomes important to a region, it may gain greater political bargaining power and local politicians will seek to gain favorable terms for their local industry – in the form of subsidies/tariffs.

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Promulgate some corresponding industrial policies and policies on trade barriers

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The new trade theory holds that the comparative advantage as the basis of trade is not static, especially in knowledge and technology intensive industries. Due to the strong external economy, the variability of comparative advantage is more obvious, so it is possible to support some domestic industries through the conscious intervention of government economic policies, Make it break through the constraints of existing resource endowment and technical level, and artificially create comparative advantages.

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In the market economy, the government should actively promote the improvement of the market economic system, strengthen the construction of the market environment, actively promote the development of free trade, and improve the backup support for the competition and innovation of enterprises. For example, improve the investment in educational facilities at all levels, improve the construction of public service infrastructure, and establish and improve relevant policies and regulations

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The government can support or protect domestic enterprises to increase their output in the international market, continuously improve their profit share and better improve their welfare level, so as to promote the formation of economies of scale. On the other hand, on the premise of improving the technical level, the marginal cost curve of manufacturers will move down. In other words, the government supports and intervenes in the technological production level of enterprises to realize the development of economies of scale.

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For developing countries, due to the low per capita income and the narrow scale of the domestic market, the expansion of manufacturers' production scale is limited. Moreover, due to historical reasons, the industries with economies of scale are mainly infant industries, and their scale is still relatively small. As for those modern high-tech industries with extensive external economy, a considerable number of developing countries, especially small developing countries, have not even started, let alone economies of scale.

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Taking China as an example, due to the local protectionism caused by the long-term planned economy and financial contract system, China lacks a unified domestic market. Although the market potential is great nationwide, there are still considerable differences compared with developed countries in terms of internal economies of scale and external economies of scale.
In terms of enterprise agglomeration economy, the production areas of some products in China, especially those with high prices and large profits, are scattered, so it is impossible to form an agglomeration economy. In 1990, most of China's 15 important manufactured products were produced in more than 25 regions, including products with high technical requirements, such as automobiles, watches, soda ash, chemical fiber, etc., and the number of regions where the output of these products accounted for more than 5% of the country was no less than 6. The sum of the three regions with the highest output was only watches, bicycles, automobiles Chemical fiber and a few other products.