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INTERNATIONAL TRADE. MK, UNIT 27 Reader, p.2 0 - 23. Match to get OPPOSITES. Free trade Developing country Developed industry Competitive Import Deficit. Surplus Uncompetitive Advanced/developed Developing/underdeveloped/infant Protectionism Export.

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slide1

INTERNATIONAL TRADE

MK, UNIT 27

Reader, p.20-23

match to get opposites
Match to get OPPOSITES
  • Free trade
  • Developing country
  • Developed industry
  • Competitive
  • Import
  • Deficit
  • Surplus
  • Uncompetitive
  • Advanced/developed
  • Developing/underdeveloped/infant
  • Protectionism
  • Export
make word partnerships mk p 132
Make word partnerships (MK,p. 132)
  • Comparative cost
  • Absolute
  • Comparative
  • Strategic
  • Infant
  • Industry
  • Principle
  • Industry
  • Advantage
  • Advantage
absolute or comparative advantage
Absolute or comparative advantage?
  • Brazil-coffee
  • China-shoes
  • USA-computers
  • Canada-timber
  • South Korea –hi-fi
  • Absolute
  • Comparative(low labour costs)
  • Comparative
  • (technologically advanced)
  • Absolute
  • Comparative (educated labour force, low labour costs)
free trade vs protectionism
Free trade vs. Protectionism
  • International trade (imports and exports) without government restrictions
  • Trade of goods and services without trade barriers
  • Protection of domestic industries against foreign competition
  • Government restrictions are placed on the imports of foreign competitors

(tarrifs, quotas and subsidies)

trade barriers
TRADE BARRIERS

Tariffs

Import quotas

Embargo

Subsidies

Non-tariff barriers:

Import substitution

Safety norms

Customs difficulties and delays

verb opposites
Verb opposites

set/impose tariffs/quotas/barriers

v.

lift/abolish quotas/embargo

name the trade barrier
Name the trade barrier

Tariffs

  • Taxes on imported goods. They raise the price to customers and make them less attractive.
  • Limits on the quantity of a product that can be imported into a country e.g. 200,000 cars.
  • Laws and safety guidelines.
  • Making it difficult to arrange all certificates necessary to import into a country.
  • When a country produces and protects goods that cost more than those made abroad.
  • Money paid by a government to producers of certain goods to help them provide low-priced goods without loss to themselves.
  • A government order to stop trade with another country.

Quotas

Safety norms

Custom difficulties and delays

Import substitution

Subsidy

Embargo

free trade or protectionism
It protects jobs (votes).

It allows specialization.

It strengthens absolute/comparative advantage.

It makes import more expensive.

It provides access to more markets.

It prevents dumping.

It breaks down barriers between the peoples and nations

It protects domestic industries (esp. strategic / infant industries).

It allows freer movement of resources.

It adds costs to consumers.

It increases international competition and efficiency.

It guarantees consumers the lowest possible prices

I

FREE TRADE or PROTECTIONISM?
the world trade organization wto
THE WORLD TRADE ORGANIZATION (WTO)

The only global international organization dealing with the rules of trade between nations.

At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments.

The goal is to help producers of goods and services, exporters, and importers conduct their business.

imf international monetary fund
IMF – International Monetary Fund

An international organization created for the purpose of: 1. Promoting global monetary and exchange stability.2. Facilitating the expansion and balanced growth of

international trade.3. Assisting in the establishment of a multilateral system of payments for current transactions.

The IMF plays three major roles in the global monetary system.

  • 1. The Fund surveys and monitors economic and financial

developments

  • 2. Lends funds to countries with balance-of-payment

difficulties

  • 3. Provides technical assistance and training for countries

requesting it.

SOURCE: www.businessdictionary.com

vocabulary in focus
Vocabulary in focus:

GRANT A LOAN

REPAY A LOAN

RESCHEDULE A LOAN POSTPONE A LOAN

PAY INTEREST REPAY THE PRINCIPAL

RENEW A LOAN ROLLOVER A LOAN

slide13

READINGPROTECTIONISM AND FREE TRADE RB, p.20, 21

Read paragraphs 1 & 2 to explain:THE COMPARATIVE COST PRINCIPLEABSOLUTE/COMPARATIVE ADVANTAGE(REASONS & EXAMPLES)‏

Read paragraphs 3, 4 & 5 to explain:PROTECTIONISM AND REASONS FOR PROTECTIONISMTYPES OF TRADE BARRIERS

slide14

Read paragraphs 6 & 7 to explain:

FREE TRADE: GATT AND WTO

OPPOSITION TO FREE TRADE

Read paragraphs 8 & 9 to explain:

PROBLEMS & FEARS OF DEVELOPING COUNTRIES (IMF)

THE POSITIVE EXAMPLE OF THE “ASIAN TIGERS” COUNTRIES‏

match the collocations
Match the collocations:

Impose/raise/lower/remove

Rollover/renew

Reschedule/postpone

Raise

Specialize

Protect

Achieve

Compete

reduce

a deficit

a payment

tariff/trade barriers

in the production of goods

living standard

strategic industries

a loan

economies of scale

internationally

slide16

VOCABULARY

COLLOCATIONS: WHICH VERB IS MISSING?

r_______ the living standard

p ______ strategic industries

r_______ a balance of payments deficit

d________ or w________ competitors

r________ against restrictions

i_________ restrictions

a_________ economies of scale

s______ a limit to imports

slide17

p______ revenue for the government

g______ favourable conditions

p_____ the interest

r______ the principal

r______ (renew) a loan

r _________ (postpone) repayments

l_______the economy

l_______trade barriers

the import export balance
The Import-Export Balance

Fill in the gaps:

An _________advantage exists if a country can ________ something more ______ than anyone else. Examples are: _______ from Saudi Arabia, _______ from Canada and ____ from Brazil.

Cheaply, absolute, produce, coffee, timber, oil

A country has a comparative ______ for ______ that it can make more _______ or ______than other goods. China has low ________ costs. It gives it comparative advantage. In producing labour- intensive goods such as ______ and _____.

Better, shoes, goods, labour, textiles, advantage, cheaply

slide19

BALANCE OF TRADE (trgovinska bilanca)

-the ___ in value between the products a country ____ and those it ____.

imports, exports, difference

slide20

MATCH THE CONCEPT AND ITS EXPLANATION:

If a country exports more than it imports it has a ______ ______.

If a country imports more than it exports, it has _____ _____.

Trade deficit

Trade surplus

slide21

KEY

  • If a country exports more than it imports it has a trade surplus.
  • If a country imports more than it exports, it has trade deficit.
slide22

BALANCE OF PAYMENTS (PLATNA BILANCA)

It is a comparison between total receipts and payments arising from a country’s international trade in goods, services and financial transactions

slide23

Visible trade is trade in goods, physical things you can touch and weigh :

Food and produce

Manufactured goods

Specialist goods

Raw materials

Electrical appliances

Machine tools

slide24

Invisible tradeis trade in services like:

tourism

banking

government payments

shipping

civil aviation

travel

slide25
quiz
  • India bought wine from Spain.
  • Indian student goes to Spain for studies.
  • Indian Insurance Company insures a Spanish ship.
  • UK car dealer buys German cars.
  • German tourist visits UK for holidays.
  • UK resident uses German bank.
  • Invisible export for UK.
  • Visible export for Spain.
  • Invisible import for Spain.
  • Invisible exports for

Germany.

E. Visible exports for Germany.

F. Invisible export for Spain.

slide27

VOCABULARY:TRADE SURPLUS ≠ TRADE GAP/deficit

TRADE SURPLUS→ when the export is bigger than import

TRADE GAP → when the import of goods and services is

bigger than export

EXPLAIN THE FOLLOWING NEWS HEADLINES:

“China trade surplus widens in January”

“The US trade gap narrowed to $58.2bn in November”

“U.S. trade gapwidens in April”

  • Trade gap (deficit) widens:

imports keep rising over exports

  • Trade gap narrows:

exports start rising

  • Trade surplus widens:

exports keep rising over imports

  • Trade surplus narrows:

__________________________?

slide28

Reading and discussion:

For and against free trade (MK, p. 134-5)

  • Classify the statements, for and against
international trade

International trade

Which set of arguments regarding free trade and the policies of WTO do you find the most convincing?

slide31

HOMEWORK: Read on international trade and protectionism in our materials, watch and read to inform your opinion on the positive and negative effects of free trade and globalization.

Pick a side in the debate will hold on Friday.

The topic: Free trade is the only form of fair trade.

http://www.youtube.com/watch?v=Vvfzaq72wd0

Noam Chomsky on Globalization:

http://www.youtube.com/watch?v=RdYwAXZh0ME

Further interesting videos and presentations:

http://www.youtube.com/watch?v=SyJ23a7_fvQ&feature=related

http://www.youtube.com/watch?v=oh03fuIlQNI&feature=related

HW: Reading & writing:

Education and protection, MK p 133

Read and answer the questions in writing (in detail).‏

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