1. Unit IX – Global Interdependence
International Trade, International Economic Development

2. International Trade Export – Import – Goods sold to another country
Goods bought from another country –

3. Exports by nation

4. Advantages of International Trade
Obtaining scarce goods – nations trade for goods that they can otherwise not get on their own
EX – diamonds in the US, commercial aircraft to the rest of the world
Comparative advantage – ability of one country to produce a good more efficiently than another.
Japan makes TV’s better than the US does, so we get our TV’s from them

5. Advantages of International Trade
Creating jobs – by exporting products, producers expand market and thus can hire more workers

6. Supporting domestic industries
Tariffs – tax on imports to make them more expensive to buy than domestic goods
Some foreign luxury cars are more expensive than domestic luxury cars
Quotas – limit on the amount of foreign goods imported
Reagan put a limit on Japanese cars in the 1980’s to save American autoworkers

7. Free Trade Zones
Area where goods may be handled and manufactured without the intervention of customs
Sea ports, international airports,

8. Free Trade Agreements
WTO – oversees and organizes trade rules, settles trade disputes, and helps developing countries
Criticism
Favors major corporations instead of workers, environment, and poor countries

9. International Trade as a political Weapon
Embargos – nation’s agree to block trade with a target nation
WWII, embargo against Germany, Japan by USA.

10. International Trade as a political Weapon
Trade Agreements – reduce or eliminate restrictions between nations to promote free trade

11. Trade
Balance of trade – difference between value of exports and imports
Trade surplus – exports > imports = making money
Trade deficit – exports < imports = losing money

12. Negatives of a trade deficit
Lower GDP
Higher national debt
Higher unemployment
Lower savings rates

13. Globalization

14. Free Trade Agreements
NAFTA – USA, Mexico, Canada – eliminated barriers to trade between the countries
EU – goods, services, and people can move freely between these countries; uses euro as currency

15. Free Trade Agreements
IMF – allows countries to donate to money pool and then borrow when they need to meet payments
CAFTA – USA, Costa Rica, El Salvador, Guatemala, Honduras, Nicuragua, Dominican Republic
SEATO – Australia, France, New Zealand, Pakistan, Philippines, Thailand, UK, USA (no longer in effect)
World Bank – provides loans to developing countries

16. What has the increase in international trade created among nations of the world?
Income inequality

17. Concerns over international trade
Environmental – difficult to monitor multinational (MNC) businesses b/c of varying environmental regulations
Worker exploitation – MNC’s use nations with cheap labor to increase profit margin’s at expense of worker safety and health.

18. Internationalism
Nations should cooperate to promote common aims

19. United Nations (UN)
Environmental – Leaders signed treaties to safeguard animal and plant life and limit global pollution
Income inequality – called on businesses to promote economic development in the countries they operate in.

20. United Nations (UN)
Human Rights – basic freedoms that all people should enjoy
Universal Declaration of Human Rights – basic rights that all people should have (movement, seek asylum, nationality, property, have a family, etc)
International Tribunals – courts that hear and make judgments on violations of human rights