2 Read to LearnDescribe free trade.Indicate who benefits and who does not benefit from free trade.
3 The Main IdeaProtectionism is the practice of putting limits on foreign trade to protect businesses at home. However, protectionism decreases competition and generally increases the prices that consumers pay for goods and services. More nations are moving toward free trade.
5 Key Termthe practice of the government putting limits on foreign trade to protect businesses at homeprotectionisma tax placed on imports to increase their price in the domestic markettariff
6 Key Terma limit placed on the quantities of a product that can be importedquotaa ban on the import or export of a productembargo
7 Key Termfree tradewhen there are few or no limits on trade between countries
8 Protectionism and Free Trade Global competition often leads to trade disputes.Protectionism and free trade are two opposing points of view involved in trade disputes.
9 ProtectionismJapan practices protectionism in the areas of rice farming and auto production.protectionismthe practice of the government putting limits on foreign trade to protect businesses at home
10 Reasons to Restrict Trade ProtectionismReasons to Restrict TradeForeign competition can lower the demand for products made at home.Companies at home need to be protected from unfair competition.Industries that make products related to national defense need to be protected.
11 Reasons to Restrict Trade ProtectionismReasons to Restrict TradeThe use of cheap labor in other countries can lower wages or threaten jobs at home.A country can become too dependent on another country for important products.Other countries might not have the same environmental or human rights standards.
12 A tariff is an example of a trade barrier. ProtectionismA tariff is an example of a trade barrier.tariffa tax placed on imports to increase their price in the domestic market
13 Trade SanctionsA government can impose a trade sanction, or penalty, on other countries, usually by adding tariffs.
14 A quota is another example of a trade barrier. ProtectionismA quota is another example of a trade barrier.quotaa limit placed on the quantities of a product that can be imported
15 ProtectionismAn embargo is a trade barrier that is usually used for political or military reasons.embargoa ban on the import or export of a product
16 Free TradeSupporters of free trade think all countries should be free to compete anywhere in the world without restrictions.free tradewhen there are few or no limits on trade between countries
17 Free Trade Free trade opens up new markets in other countries. Benefits of Free TradeFree trade opens up new markets in other countries.Free trade creates new jobs.Competition forces businesses to be more efficient and productive.
18 Free TradeBenefits of Free TradeConsumers have more choices in the variety, prices, and quality of products.Free trade promotes cultural understanding and encourages countries to cooperate with each other.Free trade helps countries raise their standard of living.
19 Free TradeTo reduce limits on trade, nations form trade alliances.NAFTA (North American Free Trade Agreement) combined the economies of the United States, Canada, and Mexico.
20 Free TradeSome people opposed NAFTA because they feared some workers would be displaced when trade barriers were lowered.
21 Graphic Organizer North American Free Trade Agreement (NAFTA) Association of Southeast Asian Nations (ASEAN)European Union (EU)United States, Canada, MexicoAustria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden, United KingdomBrunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam
22 Give three reasons for protectionism. protects businesses from unfair competition, from countries that violate U.S. human rights or environmental standards, and from overdependence on another country’s products
23 Give three reasons for free trade. encourages competition, gives consumers more choices for products, promotes cultural understanding
24 What are some of the major trade alliances in the world today? NAFTA, the EU, and ASEAN