INTERNATIONAL TRADE. GLOBAL TRADE, WORLD TRADE, FOREIGN TRADE, REGIONAL TRADE vs. HOME TRADE, LOCAL...

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INTERNATIONAL TRADE

Transcript of INTERNATIONAL TRADE. GLOBAL TRADE, WORLD TRADE, FOREIGN TRADE, REGIONAL TRADE vs. HOME TRADE, LOCAL...

Page 1: INTERNATIONAL TRADE. GLOBAL TRADE, WORLD TRADE, FOREIGN TRADE, REGIONAL TRADE vs. HOME TRADE, LOCAL TRADE, DOMESTIC TRADE, INWARD TRADE.

INTERNATIONALTRADE

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INTERNATIONAL TRADE

GLOBAL TRADE, WORLD TRADE,FOREIGN TRADE, REGIONAL TRADE

vs.

HOME TRADE, LOCAL TRADE, DOMESTIC TRADE, INWARD TRADE

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EXPORTING AND IMPORTING(NOUNS AND VERBS)

EXPORTER / IMPORTER

Last year, the United States EXPORTED cotton to Italy, and IMPORTED olive oil from that country.

Croatia should increase its EXPORTS. The country's IMPORTS are very high. (n.pl.)

Vegeta is AN EXPORT for Croatia and AN IMPORT for Hungary. (n.sg.)

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Opposites:

deficit -

earnings -

debit -

exports -

trade liberalisation, free trade-

visible trade -

developed countries -

surplus

expenditure

credit

imports

protectionism

invisible trade

developing countries, less

developed countries

(LDC), underdeveloped

countries

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BALANCE OF PAYMENTS

«A nations' balance of payments records all transactions

between its residents and the residents of other foreign

nations (including individuals, businesses and

governmental units). These transactions include all visible

exports and imports, imports and exports of services,

tourist expenditures, interest and dividends received or paid

abroad, purchases and sales of financial or real assets

abroad etc. «

Source: McConnell, C.R.., Brue, S.L. (1996). Economics. The McGraw-Hill Companies.

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BALANCE OF PAYMENTS

What transactions does it include?

Between whom?

Examples of transactions?

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BALANCE OF PAYMENTS

«A nations' balance of payments records all transactions

between its residents and the residents of other foreign

nations (including individuals, businesses and

governmental units). These transactions include all visible

exports and imports, imports and exports of services,

tourist expenditures, interest and dividends received or paid

abroad, purchases and sales of financial or real assets

abroad etc. «

Source: McConnell, C.R.., Brue, S.L. (1996). Economics. The McGraw-Hill Companies.

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VISIBLE OR INVISIBLE TRADE? EXPORTS OR IMPORTS?

e.g.This is an export for X, and an import for Y.1. An Englishman buys some olive oil

in France and takes it back to England.

2. An English person buys a ticket for the Dubrovnik summer festival.

3. An Italian working in England buys an Italian car in England.

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VISIBLE OR INVISIBLE TRADE? EXPORTS OR IMPORTS?

e.g.This is an export for X, and an import for Y.4. A German buys a ticket to watch an

American band play in Germany.5. A Norwegian ship carries frozen

lamb from New Zealand to England.6. A Canadian ship owner insures his

ship in London.

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Balance of Payments

vs

Balance of Trade

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Balance of Payments vs Balance of TradeFill in the missing words: exports, credits, surplus, invisible, imports

The relationship of visible trade exports to imports is reflected in a country’s balance of trade. A 1… in the balance of trade occurs when exports exceed imports and a deficit occurs when 2… are greater than 3… . The balance of trade is the major component of a country’s balance of payments, which also includes debits and 4… resulting from 5… trade.

Source: http://www.britannica.com/EBchecked/topic/630560/visible-trade

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Fill in the missing words: exports, credits, surplus, invisible, imports

The relationship of visible trade exports to imports is reflected in a country’s balance of trade. A SURPLUS in the balance of trade occurs when exports exceed imports and a deficit occurs when IMPORTS are greater than EXPORTS. The balance of trade is the major component of a country’s balance of payments, which also includes debits and CREDITS resulting from INVISIBLE trade.

Source: http://www.britannica.com/EBchecked/topic/630560/visible-trade

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What does the BoP consist of? 3 parts? Where does money come from and go?

Within the BOP there are three separate categories under which different transactions are categorized: the current account, the capital account and the financial account. In the current account, goods, services, income and current transfers (e.g. donations, foreign pensions) are recorded. In the capital account, physical assets such as a building or a factory are recorded. And in the financial account, assets pertaining to international monetary flows of, for example, business or portfolio investments, are noted. Source:www.investopedia.com

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What does the BoP consist of?Where does money come from and go?

Within the BOP there are three separate categories under which different transactions are categorized: the current account, the capital account and the financial account. In the current account, goods, services, income and current transfers (e.g. donations, foreign pensions) are recorded. In the capital account, physical assets such as a building or a factory are recorded. And in the financial account, assets pertaining to international monetary flows of, for example, business or

portfolio investments, are noted. Source:www.investopedia.com

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Trade – News Headlines

China posts massive trade deficit (March, 2012)

China posts surprise trade surplus (March, 2013)

China recorded a trade deficit in February 2014.

China exports fall as trade surplus hits record (FT, 8 Feb 2015)

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Trade deficit or trade surplus?

‘...faltering demand for Chinese goods in the EU and other markets, export factories slow to reopen after Chinese New Year, imports grow at a strong pace...’

‘The majority of the slump in imports was the result of falling commodity prices, especially coal and oil…’ (FT)

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Translate the following: Izvoz zlata popravlja trgovinsku bilancu

(Aug, 2012) Bez deficita tekućeg računa platne bilance u

2013. (Banka, Dec, 2012) Hrvatski izvoz porastao 8,7 posto, 63% robe

ide u zemlje EU: Deficit u robnoj razmjeni s inozemstvom u prvih 11 mjeseci 2014. godine iznosio je tako 48,4 milijarde kuna, što znači da je manji za 895 milijuna kuna ili 1,8 posto u odnosu na godinu prije (VL, 10 Jan, 2015)

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PROTECTIONISM vs.FREE TRADE(in favour or against free trade?)

trade barriers protectionism quotas open borders tariffs laissez-faire deregulation

strategic industries

liberalise subsidise infant industries restrictions customs duties import

substitution

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Match the two columns: Comparative To raise Real Absolute Comparative Factors of Division of

labour production income cost principle living standards advantage advantage

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WTO

“The World Trade Organization (WTO) is the only international organization dealing with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.” (www.wto.org)

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Benefits & misunderstandings?

Explain how the WTO sees itself by showing its benefits and a list of possible misunderstandings. (WTO web sites)

Match the list with the ex. in MK, 2010, p.134/135

Explain the WTO position in the US Clean Air Act and the Endangered Species Act. How does the WTO justify its position? (WTO web-sites)

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TTIP: PROS AND CONS

VIDEOhttps://www.youtube.com/watch?v=_znzkaxwtnchttp://ec.europa.eu/trade/policy/in-focus/ttip/about-ttip/http://euranetplus-inside.eu/ttip-good-or-bad/?gclid=CKnLrePPsMQCFUnLtAodJ3MAVgTEXT: http://www.independent.co.uk/voices/comment/what-is-ttip-and-six-reasons-why-the-answer-should-scare-you-9779688.html