INTERNATIONAL
TRADE
1.
2.
3.
4.
Define the term international trade.
Explain the rationale for international trade
Explain the advantages and disadvantages of
international trade.
Explain factors that influence imports and exports.
Are these all products we use?
• Toyota
• Mitsubishi
• Honda
• Dell
• Apple
• Hewlett Packard
• Nokia
• Iphone
• Blackberry
• Samsung
Trade
• Buying and selling goods and services from other
countries
• The purchase of goods and services from abroad that
leads to an outflow of currency from Trinidad and Tobago
– Imports (M)
• The sale of goods and services to buyers from other
countries leading to an inflow of currency to Trinidad and
Tobago – Exports (X)
Name three countries that Trinidad and
Tobago Trades with
Rationale for International Trade
• http://www.youtube.com/watch?v=38hvvAzgXZY
Activity
Govt lifeline to used car dealers By Clint Chan Tack and Sasha Harrinanan Friday, July 22
2011 Newsday http://www.newsday.co.tt/news/0,144258.html
Minister of Trade Steven Cadiz at the post Cabinet news briefing
held at the Office of the Prime Minister, St Clair. ...
“GOVERNMENT yesterday threw a lifeline to the domestic
foreign used car industry by extending the age limit of the
cars from four to six years.”
QUESTION FOR DEBATE:
Can the TT government improve standard of living for locals by
passing legislation that increases trade in foreign car imports?
• Group 1 – Local new car industry
• Group 2 – Foreign used car industry
• Group 3 – Citizens looking for ‘cheap car’ alternatives
• Group 4 – Citizens who already own cars
• Group 5 – Maxi Taxi Association
Advantages of Trade
• More variety of goods and services
• Much larger market for your products
• Economies of Scale
• Increased employment
• Increased foreign exchange earnings
• More efficient allocation of resources
• Improved political ties and international relations
All of these advantages lead to improved quality of life for
residents of a country
Disadvantages of International Trade
• Creates Dependency
• Unfair foreign competition
• Depletion of mineral resources
What would make you buy foreign goods?
Factors that determine ‘M’ and ‘X’
Imports
Exports
• Domestic income levels
• Foreign income levels
• The exchange rate
• The exchange rate
• Domestic product prices
• Domestic product prices
vs. foreign product prices
• Quality of domestic goods
• Influence of the media
and changing tastes of
consumers
vs. foreign
• Quality of imported goods
• Changing tastes of
consumers in the rest of
the world
Evaluation
1. What is a disadvantage of international trade?
(a) The world is a market for your product.
(b) There is a larger variety of goods available.
(c) A country is able to earn foreign exchange.
(d) A country may become dependent on other countries
for vital products.
Q2
• If an economy is closed, which benefits will it enjoy?
(a) The benefits of a larger variety of goods
(b) The benefits of self-sufficiency
(c) The benefits of the world as a market
(d) The benefits of improved international relations
Q3
Which of the following factors influence the level of
exports?
(a) The exchange rate
(b) Domestic income levels
(c) The type of goods imported
(d) The quality of imported goods