1. International Trade

2. Why Nations Trade Resources Distribution Unequal Resource Distribution
Natural Resources
Copper, iron, timber
Human Capital
Education, skill
Physical Capital
Roads, warehouses, machines
Unequal Resource Distribution
Most resources are not evenly divided around the world. Some countries have far more of one resource than others

3. The Need for Trade Production Possibilities Frontier
Absolute Advantage
Comparative Advantage
Comparative Advantage and Trade

4. Imports/Exports and Specialization
Specialization calls for each country to make those things in which it has a comparative advantage, thus allowing for more of everything to be produced

5. Trade Barriers Import Quotas
Restricts the number or amount of product allowed into a country
Voluntary Export Restraint (VER)
To reduce chances of increased trade barriers
Tariffs
A tax imposed on incoming goods
Other Barriers
Health, safety, licenses
Effects of Trade Barriers
Higher Prices
Trade Wars

6. Protectionism
Goods may be prevented from entering a country to prevent the loss of jobs, protect growing industries, or for reasons of national security.
For the same reasons, people may be prevented from entering a country because of unemployment or fear of loosing jobs.

8. International Agreements
Most Favored Nation
A nation that has reduced trade tariffs with the U.S.
General Agreement on Tariffs and Trade (GATT)
The first international agreement on trade
World Trade Organization (WTO)
An expansion of and more robust version of GATT
European Union
To compete better, most European countries formalized an agreement to eliminate trade barriers within the Union, and to adopt a singe currency
North American Free Trade Agreement (NAFTA)
Agreement between Canada, the U.S., and Mexico to reduce and eliminate trade barriers
Other Agreements
Many other agreements exist around the world to facilitate trade between groups of countries

10. Protests Against WTO
The free trade movement pushed by businesses has also created a backlash by people who think that free trade agreements promote labor abuses and job losses

11. Exchange Rates Appreciation
When the value of a currency goes up compared to another currency
Depreciation
Value of a currency goes down
Strong Dollar/Weak Dollar
When the U.S. Dollar is strong, it help to reduce the cost of imports, but weakens exports, and vise versa

12. Trade Balance Trade Surplus and Deficit U.S. Trade Deficit
The total amount of exports minus imports
U.S. Trade Deficit
The U.S. has long had a negative trade balance, though some feel it is growing too large