INTERNATIONAL TRADE

• International Trade Vocabulary• Free Trade• Trade Barriers• Trade Agreements• Global Developments• United Nations• Human Rights

INTERNATIONAL TRADE VOCABULARY

• Import – a product purchased from another country.• Export – a product sold to another country.• Global interdependence – idea that countries of the world

are growing increasingly dependent on one another.• Comparative advantage – ability of one country to

produce a product at a lower opportunity cost than another country.

• Favorable balance of trade – a country exports more than they import. Foreign trade is profitable to the nation.

• Unfavorable balance of trade – a country imports more than they export. Foreign trade loses money for the nation.

FREE TRADE

Arguments For Free Trade

1. Increased competition = improved products.

2. Trade restrictions damage export industries.

3. Specialization and comparative advantage lowers prices.

4. Greater political cooperation.

TRADE BARRIERS

• Protectionism – idea that country should impose barriers to international trade in order to protect domestic industries.

Arguments Against Free Trade

1. Job security is threatened.

2. Protection of nation’s economic security is needed.

3. Protection of infant industries is needed.

Trade Barriers• Tariff (protective, revenue)• Quota – a limit on the value

or number of products to be brought in from another country

• Embargo – a refusal to trade with another country.

• Trade Cartel – a group of nations band together to control the supply & price of a product. (OPEC)

OPEC COUNTRIES

TRADE AGREEMENTS• NAFTA – North American Free Trade Agreement (US,

Canada, Mexico)• CAFTA – Central American Free Trade Agreement

(US, Central American Countries• WTO – World trade Organization – app. 150 nations

seeking to increase trade and limit trade barriers.• EU – European Union – 27 European countries have

created a single economic entity.

Global DevelopmentsProtectionism – idea that a country wants to prevent

free trade to safeguard the jobs, and the overall economy.

Developed Country – a country which is highly industrialized, with high levels of technology, and a large middle class.

Developing Country – a country which is transitioning from a more traditional economy to an industrialized nation. There are various levels of developing nations.

Arguments for Supporting Development1) Higher per capita GDP.2) Opens markets to sell goods and services.3) Promotes democracy.

Issues for Supporting Development1) Environmental protection.2) Protection of Domestic Jobs.

United Nations• Internationalism – nations should cooperate to

promote common aims, such as supporting economic development and fighting terrorism.

Goals of the United Nations• Promote peace• Provide aid to nations• Promote & Protect Democratic Elections• Prevent Violence• Provide aid to Refugees

Globalization• Interdependence and interaction among individuals

and nations working across barriers of distance, culture, and technology.

Global Issues1) Environmental Destruction 2) Economic

Inequality

Human Rights

Declaration of Human Rights1) Protection of Rights

– Similar to US Bill of Rights– Additions – freedom of movement, right to asylum,

right to nationality, right marry/family, own property

2) Raising Standards of Living– Includes - right to security, right to work, equal pay

for equal work, right to form and join trade unions.– Additions – standard of living acceptable for health

and well-being, right to education

Human Rights Violations1) Genocide – deliberate killing of members of a

racial or cultural group. (Nazi Germany, Rwanda)2) Apartheid – separating people based on race or

ethnicity. (South Africa, Similar Issues in Southern United States – Jim Crow Laws)