1. A way of obtaining scarce resources
International Trade
A way of obtaining scarce resources

2. Comparative Advantage
The ability of a country to produce a good at a relatively lower cost than another country can
Because of comparative advantage, nations specialize
They use their scarce resources to produce those things they produce better than any other countries
Examples:
Saudi Arabia: Oil
Columbia: Coffee

3. Trade Restrictions
Protective Tariffs: a tax on an imported good to make the price of imported goods higher than the price of the same goods produced domestically
Encourages people to buy American products

4. Trade Agreements European Union (EU)
An organization of independent European nations
No trade barriers among these nations
Goods, services, and even workers can move freely among nations
Use a common currency, the EURO

5. Trade Agreements continued
NAFTA
North American Free Trade Agreement
Eliminates all barriers to trade among US, Canada, and Mexico

6. Trade Agreements continued
World Trade Organization (WTO)
Oversees trade among nations
Organizes negotiations about trade rules
Provides help to countries that are trying to develop their economies
Settles trade disputes

7. Unfair Balances of Trade
A balance of trade is the difference between the value of a nation’s exports and its imports
If a nation imports more than it exports, it has a trade deficit
A nation exports more when its currency is weak because its goods are cheaper
A nation exports less when its currency is strong because its goods are more expensive

8. Effects of Trade Deficits
Value of a nation’s currency is devalued on foreign exchange markets
Supply of currency floods the market, causing a further devaluation of the currency
Unemployment

9. Trade Sanctions and Embargos
Trade sanctions are efforts to punish another nation by imposing trade barriers
Embargos are an agreement among a group of nations that prohibits them from trading with a target nation

10. OPEC
OPEC's objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.
Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates, and Venezuela