1. International Trade, Globalisation, EU 3.7 & 3.8
David Kelly, St Gerard's School

2. Why Ireland Imports goods
Unsuitable climate e.g. Certain fruit
Raw materials may not be available in Ireland e.g. Oil, steel
Irish Consumers want variety
Certain countries have natural skills. E.g. Swiss watch making
To improve international relations with other countries
It is cheaper to import than to produce ourselves
Import Substitution
Producing goods in Ireland to replace foreign Imports
David Kelly, St Gerard's School

3. Visible vs Invisible Imports
Food
Foreign bands playing in Ireland
Oil
Irish family on holidays abroad
Chemicals
Irish people flying on foreign airlines
Cars
Irish students in foreign school tour
Wine
Irish people getting insurance from a foreign company
Visible Imports
When a country buys goods from another country
Invisible Imports
When a country buys SERVICES from another country
David Kelly, St Gerard's School

4. David Kelly, St Gerard's School
Why Ireland Exports
The Irish market is too small
4.8 million in Ireland versus 500 million in the EU
Surplus production of a good
We produce more than domestic demand
Eg: Beef, Dairy, Pharma
Demand for Irish products abroad
Eg: Beef, Dairy, Alcohol are seen as premium products
Maintain jobs in Ireland
Brings money into the country
Helps the Balance of Payments
David Kelly, St Gerard's School

5. Visible vs Invisible Exports
Live Animals
Irish band playing a concert abroad
Meat
A foreign person holidaying in Ireland
Dairy Products
Foreign person flying with Aer Lingus
Pharmaceuticals
Irish horse winning a race in England
Computers
David Kelly, St Gerard's School

6. Balance of Trade and Balance of Payments
Balance of Trade (Merchandise Balance)
Visible Exports minus Visible Imports
If Exports are greater than imports we have a trade surplus
If Imports are greater than exports we have a trade deficit
Invisible Balance
Invisible Exports minus Invisible Imports
Balance of Payments
Total Exports minus Total Imports
CSO Data
David Kelly, St Gerard's School

7. Balance of Trade and Balance of Payments
Example:
Visible Exports 16,629m; Visible Imports 13,195m
Invisible Exports 900m; Invisible Imports 970m
Balance of Trade (Merchandise Balance)
Visible Exports minus Visible Imports
16,629m - 13,195m = 3434m surplus
Balance of Payments
Total Exports minus Total Imports
17,529m (16, ) – 14,165m ( ) = 3,364m surplus
David Kelly, St Gerard's School

8. Balance of Trade and Balance of Payments
Example (Alternative):
Visible Exports 16,629m; Visible Imports 13,195m
Invisible Exports 900m; Invisible Imports 970m
Balance of Trade (Merchandise Balance)
Visible Exports minus Visible Imports
16,629m - 13,195m = 3434m Surplus
Invisible Balance
Invisible Exports minus Invisible Imports
900m – 970m = 70m Deficit
Balance of Payments
Balance of Trade +- Invisible Balance
3434m minus 70m = 3,364m Surplus
David Kelly, St Gerard's School

9. European Union Membership
EU Social Charter
Allows for the free movement of EU citizens across the EU
No visa required to enter another EU country
EU citizens can work freely in any EU country without restrictions
Ireland can fill jobs/labour shortages with talented workers from abroad
Note: Norway and Switzerland are NOT EU countries
Drawbacks
Difficult to control movement of people at your borders
Criminal activity might be difficult
We might lose talented workers who move to other EU countries
David Kelly, St Gerard's School

10. European Union Membership
Single European Market
Allows for the free movement of good an services between EU countries
No border checks between EU countries
EU countries cannot place tariffs on goods coming from other EU countries
Irish companies can compete for Government contracts in other EU countries
Benefits
Drawbacks
David Kelly, St Gerard's School

11. European Union Membership
Economic and Monetary Union (EMU)
Countries that use the Euro as their currency are part of the EMU
Benefits
Drawbacks
David Kelly, St Gerard's School

12. David Kelly, St Gerard's School
Globalisation
Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange.
Watch
Globalisation Explained
History
The Globalisation process began after World War II as countries began to remove barriers to trade with each other
What are example of “barriers to trade” that exist within countries?
The advent of the internet and modern transport systems has further increased the level of globalisation across the planet
David Kelly, St Gerard's School

13. David Kelly, St Gerard's School
Globalisation
Growth of Transnational Companies (Multinational Companies)
These are large companies with bases (shops/factories/offices) spread across the globe
Ireland is very attractive to these companies due to:
Our low corporation tax (tax on business profits)
Educated and skilled workforce
English speaking country
Access to EU market without barriers to trade
Read
David Kelly, St Gerard's School

14. David Kelly, St Gerard's School
Globalisation
Benefits
Drawbacks
Consumer
More choice
Lower prices (competition)
Improved Quality (competition)
Low prices – but at what cost? (Worker’s rights/environment)
Businesses
Access to more markets
Lower Costs
Lower tax bill
More competition means businesses are under threat
Pressure to keep prices low
Job losses
Countries
Aid economic development (job creation/improved standard of living)
Makes world citizens aware of global issues
More efficient use of world resources
Loss of individual Culture
Unfair trade
Environmental damage
Economic decline if companies leave to cheaper location
David Kelly, St Gerard's School