Specialization and Trade SS7E6a,b

Trade &Specialization: Main Ideas/Questions: Notes: How do countries get goods and services that they can’t produce on their own? Not every country can produce all the things it needs. Because of this, countries specialize in producing those goods & services that they can provide most efficiently. They look for other countries that might need what they produce, and sell the good/service. The money a specialized country raises, then goes to purchase what they want/need from other countries

Trade &Specialization: Main Ideas/Questions: Notes: Specialization In international trade (trade between countries), no country can be produce all the goods and services it needs. Specialization is a way to build an economy and to earn money to buy items that cannot be made locally.

Trade &Specialization: Main Ideas/Questions: Notes: Specialization & the Middle East Some countries in SW Asia are very rich in oil and natural gas, but lack water, farmland and the ability to produce enough food. Saudi Arabia is able to specialize in the production of oil and gas and sell these products and make a big profit. The money earned then can be used to buy food.

Trade &Specialization: Main Ideas/Questions: Notes: Specialization & the Middle East (cont’d) Israel has little oil wealth, but they have become leaders in agricultural technology even though they have a limited supply of land suitable for farming. They sell this technology to make enough money to supplement their limited food production.

Without trade with other countries…. The Middle East would not have enough food. The Middle East would not be able to trade its’ oil and other resources. Middle Eastern countries would be very poor.

Trade Barriers, Tariffs, Quotas, & Embargos Main Ideas/Questions: Notes: Trade Barriers Trade barriers are anything that slows down or prevents trade

Physical Trade Barriers Mountains, Deserts, War Zones

Look at the Map above. What trade barriers do you see Look at the Map above. What trade barriers do you see? What feature do you see that might help trade?

Political Trade Barriers Tariff Quota Embargo

Trade Barriers, Tariffs, Quotas, & Embargos Main Ideas/Questions: Notes: Tariff A tariff is a tax placed on imported goods. This is done to make the import more expensive than a similar good or service that is locally made/produced in order to protect the local businesses from outside competition.

Trade Barriers, Tariffs, Quotas, & Embargos Main Ideas/Questions: Notes: Quota A quota is a limit on quantity (amount) of imports in a given period of time. This is done so that only a specific amount of foreign goods are available for purchase which encourages consumers to purchase locally made goods and services.

Trade Barriers, Tariffs, Quotas, & Embargos Main Ideas/Questions: Notes: Embargo An embargo is when one country announces that it will no longer trade with another country. This is done to isolate the country and cause problems with that country’s economy and usually happen when two countries are having political disagreements

Cases Match the scenario with the economic action. 1. A tax of 15% makes jewelry from Mexico more expensive than jewelry made in the United States. 2. Syria attacks Israel for no reason, and the United States stops trade with Syria 3 Korea may export only 15,000 automobiles a year to the United States. Tariff Embargo Quota