Global Trade and Peace

1. WORLD HISTORY READERS Level 6-⑤ Global Trade and Peace

2. From Past to Present How were goods transported in the past? Horses, steam trains, or sailing ships What was Christopher Columbus looking for? A faster sailing route to Asia Has trading between countries always been peaceful? No, competition between countries to control commerce sometimes led to war. It still could today, but globalization has made it less likely. How has globalization opened a path to world peace? Increased connections between countries are helping to create a new global culture. International trade allows countries to get things they need from other countries. It also allows them to profit by selling their products and services. This promotes peaceful relations, rather than war.

3. Importing and Exporting What is the difference between “import” and “export”? When countries sell goods to other countries, we say they export them. When countries buy things from elsewhere, we say they import them. How are the rules for importing and exporting set? Every country sets its own rules about what their people can import or export. Some countries heavily tax all or some of their imports. Other countries tax exports, and still others have few, or no taxes. Each country’s customs department controls the imports and exports and the taxes people need to pay on them. A customs declaration form Customs officers at a port in New Zealand What do customs departments do?

4. Free Trade What is free trade? Free trade means trade with foreign countries without customs duties, taxes etc. or the ability to trade without too many restrictions. • Many countries want to protect their own domestic industry from competition. It saves jobs and creates income domestically. • Blocking trade is also a means used to punish a country that acts against some common shared values. For example, the US may block trade with a country that abuses the human rights of its citizens or sponsors terrorism. Do all countries want free trade? No, some countries do not welcome free trade. Why would countries want to restrict free trade? An act of terrorism

5. Changing Transportation and Communication It has made things easier! Through the Internet, people can sell almost anything and send it almost anywhere. • Banking • Education • Government services How has online shopping changed trade? Besides online shopping, what other services can be offered online? Online shopping from home Air transportation Transport by sea

6. The Challenges Customs papers, taxes, and documentation all need to be completed properly. If not, delivery can be delayed. Yes, the seller needs to be aware of the laws in the customer’s country. A candle made in India, for example, may not need a label when sold. But that same candle sold in England may need to include a warning label. Does a seller in one country need to follow the regulations and laws of another country? Products need to arrive on time. Why is it important for sellers to maintain reliability and predictability? What can delay this process? A sender filling out delivery forms

7. Global Trade What is the greatest cost global trade faces besides tariffs? Transportation China, the European Union, the United States, Japan, Germany, South Korea, France, the United Kingdom, and India Airplane, truck, and ship transportation Ships and planes have become increasingly larger in order to carry more goods at a lower cost. How have companies tried to keep transportation costs down? What are some of the top exporters and importers in the world?

8. Selling and Buying in the World What might happen if free trade was worldwide? Companies would most likely specialize in what they could manufacture or sell at a higher quality and lower cost. This would make better quality goods more accessible for everyone. It would mean encourage the making and selling of only the best products. It would also make better quality goods more accessible for everyone. Some say that small or poor countries cannot compete with powerful countries nor have many comparative advantages. Free trade What is one argument against free trade?

9. Global Trade Makes Global Businesses How can interlinked global markets help everyone? Interlinked markets and companies ensures cooperation between companies when they manufacture parts of a product in different places. This enhances the comparative advantages of the two countries. It can also aid small or poor countries to compete with the more powerful. Global businesses are funded through a global stock market, where investors from any country can participate. This means that it is often the decisions of these businesses, not governments, that determine global trade policy. Consumers and businesses are losing a sense of borders. Many people hope that the world’s more controlling governments will embrace modernity and put aside their religious or ideological differences. Global partners How can interlinked global markets lead to peace?

10. International Rules and Free Trade What organizations monitor global business? • International rules for the quality of products are set by the International Organization for Standardization (ISO). • Political relationships among countries are managed by the United Nations (UN). • Financial stability is a goal of the International Monetary Fund (IMF). Throughout history, when countries and cultures openly learned from each other, great achievements were made. The UN headquarters in New York What can we learn from history?

11. Vocabulary • candlen. a stick of wax with string inside it that you burn to make light • capital n. money and possessions, especially money used to start a business or create more wealth

12. Vocabulary • competitionn. a situation where a person or a company tries to be more successful than others • customs n. the government department that collects taxes on goods bought and sold and on goods brought into the country, and that checks what is brought in

13. Vocabulary • driver’s licensen. a card showing that you are qualified to drive because you have passed a driving test • interlinked adj. connected together with some points joined together or having an effect on each other

14. Vocabulary • submergev. to go below or make something go below the surface of water or liquid • terrorism n. the use of violent action in order to achieve political aims or to force a government to act