INTERNATIONAL TRADE

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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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VISIBLE OR INVISIBLE TRADE? EXPORTS OR IMPORTS?

• e.g.This is an export for X, and an
• import for Y.
• An Englishman buys some olive oil in France and
  takes it back to England.
• An English person buys a ticket for the Dubrovnik
  summer festival.
• 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.
• A German buys a ticket to watch an American band
  play in Germany.
• A Norwegian ship carries frozen lamb from New
  Zealand to England.
• A Canadian ship owner insures his ship in London.

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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 countrys 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 countrys balance of
  payments, which also includes debits and 4
  resulting from 5 trade.
• Source http//www.britannica.com/EBchecked/topic/
  630560/visible-trade

9
Fill in the missing words exports, credits,
surplus, invisible, imports

• The relationship of visible trade exports to
  imports is reflected in a countrys 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
  countrys 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?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.
  Sourcewww.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 orportfolio investments, are noted.
  Sourcewww.investopedia.com

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Trade - Headlines

• UK trade deficit narrows slightly
• (Jan, 2013)
• US trade deficit declined in May (2012)
• China posts massive trade deficit (March, 2012)
• China posts surprise trade surplus (March, 2013)

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Which of the three headlines are explained here?

• a rise in the sale of goods and services to other
  areas of the global economy
• 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.
• cheaper oil that reduced imports and an increase
  in exports to Europe and China.

14
Translate the following

• Izvoz zlata popravlja trgovinsku bilancu Aug,
  2012
• Bez deficita tekuceg racuna platne bilance u 2013
  Banka, Dec, 2012
• Hrvatski izvoz zaostaje za izvozom usporedivih
  zemalja, a njegov se udio na tržištu EU-a u 2012.
  godini, nakon višegodišnje stagnacije, poceo i
  smanjivati. No, obzirom na slabu potrošnju, izvoz
  ce sljedece godine biti veci od uvoza.

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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)