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International trade. International trade is the exchange of capital, goods, and services across international borders or territories. International trade.

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Presentation on theme: "International trade. International trade is the exchange of capital, goods, and services across international borders or territories. International trade."— Presentation transcript:

1 International trade

2 International trade is the exchange of capital, goods, and services across international borders or territories. International trade allows countries to gain from specialisation. Countries trade in order to benefit from each other’s resources and skills. Example : Nigeria is able to concentrate on producing its most saleable goods and services, such as petroleum products, cocoa and rubber. By trading these things which it finds it less easy to produce such as machinery for eg oil drilling equipment and transport equipment eg bus engines

3 Nigeria is not so good at producing some manufactured goods, like tractors and machinery, so it imports these from France and other European countries. It also imports agricultural machinery from India. Overall Nigeria’s biggest export earner is sales of oil and petroleum products. Nigeria is one of the world’s major suppliers of oil and this helps the country to run a huge trade surplus. Much of the revenue from oil production goes to the government as well as to large overseas companies, such as shell, that have set up operations in the country.

4 The countries trade include the following reasons : To acquire items Such as scarce metals and minerals Eg : gold, diamonds, and bauxite This can be found in some countries

5 Adequate supply of goods To achieve adequate supply for their markets of goods which they cannot produce in sufficient quantity Eg : the huge Chinese market requires imports of fresh food and vegetables, and minerals such as iron, silver and gold

6 To earn foreign currency When a firm or an individual buys a good or a service produced more cheaply abroad, living standards in both countries increase. There are other reasons consumers and firms buy abroad that also make them better off—the product may better fit their needs than similar domestic offerings or it may not be available domestically. In any case, the foreign producer also benefits by making more sales than it could selling solely in its own market and by earning foreign exchange (currency) that can be used by itself or others in the country to purchase foreign-made products.

7 Create competition To introduce more competition through international trade For eg Indian car manufacturers have to produce good quality, value- for-money cars, or Indian consumers will choose to buy foreign imports

8 To foster good relations with other countries International relations with other countries creates a trading cooperation, which in turn helps to foster good relationships among countries of the world.

9 Importing and exporting : the benefits for business An import involves the purchase of products or services from overseas. An export is a sale of products or services to individuals or businesses overseas.

10 Importing Through importing, businesses are able to acquire the best supplies. These include supplies of raw materials. Components, parts and semi- finished and finished products. Eg : the German car manufacturer Volkswagen manufactures cars in number of countries, including Germany, Brazil, India and south Africa. In India costs are lower than in Germany. Volkswagen therefore purchases 1 billion euros worth of components each year for its European factories from factories in India.

11 Exporting It makes it possible for firms to grow across the world. Eg : Massey Ferguson, the agricultural machinery brand. Originally Massey Ferguson’s global headquarters was based in Canada. Today Massey Ferguson farm machinery is manufactured in many countries around the world such as France, Denmark, Finland, USA and Brazil.

12 International Trade International Trade can also put businesses at risk. Eg: Ford and Chrysler cars are very popular in the United states. However, through international trade there is strong competition from French cars like Peugeot and Renault, German cars produced by companies like Mercedes and Volkswagen and Japanese cars such as Toyota.

13 The UAE’s top 5 import partners are India % Primary products: cotton, accessories, gems and jewelry, man-made yarn, fabrics, manufacturers of metals, cotton yarn, marine products, machinery and instruments, plastic and linoleum products, tea. China % Primary products: textile products, clothes, light industrial products, handicrafts, machinery and products made from gold, silver, copper, iron, tin. United States % Primary products: transport equipment, machinery, computer & electronic products, primary metal manufacturing, chemicals. Germany % Primary products: machineries, electronics, chemical products, measurement and control technology, iron, steel. Japan % Primary products: transport equipment, electrical machi

14 The UAE’s top 5 export partners are: Japan % Primary products: crude oil, aluminum. India % Primary products: pearls, precious and semi-precious stones, gold, pulp and waste paper, sulphur and unroasted iron pyrites, metalifer ore and metal scrap, organic and inorganic chemicals. Iran % Primary products: pearls, precious and semi-precious stones, gold, pulp and waste paper, sulphur and unroasted iron pyrites, metalifer ore and metal scrap, organic and inorganic chemicals. South Korea % Primary products: crude oil, petroleum products such as naphtha and liquefied petroleum gas, aluminum, copper. Thailand % Primary products:


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