3. economic issues affecting international trade

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3. economic issues affecting international trade

  1. 1. Economicissues affectinginternationaltrade:
  2. 2. Specification detail The extremes of income distribution internationally The effect of import protection and export subsidy on businesses
  3. 3. Average weekly pay Country Weekly Pay (£) Brazil 58 Bulgaria 25 China 23 Germany 392 India 15 Latvia 46 Slovakia 76 UK 447 • Not only wages but the cost of petrol for transport and rent are much cheaper. • If you owned a store that produced sporting equipment, what would this information tell you?
  4. 4. Good business or exploitation? IndianGarment Factory : Here Working in the Thai rice industry: Here Supplying our chocolate: Here
  5. 5. Local effects of globalbusiness Quotas: only allowing a certain amount of any product to be sold in a country Taxation: making business pay to import products. Subsidy: Paying local people a sum of money which allows them to compete globally.
  6. 6. 1. Import protectionQuotas: A government can impose an import quota on any commodity. Customers will then have less choice and local producers have no incentive to reduce their price. Those wanting to import their product will often bid/pay for their right to sell their item in this country. In turn, this will make the item more expensive.
  7. 7. 2. Import protection Taxation Governments can make business pay a certain amount of tax for each unit they want to import. Local producers do not need to pay this tax. This makes imported items more expensive Are imported items cheaper? Why/Why not?
  8. 8. Export subsidySubsidy : Here Businesses may receive a payment to export what they produce. The money they earns means they can sell their product for less and still make enough to compete. The World Trade Commission has put pressure on governments to cease this funding. Bad news for local farmers, great news for international farmers. An Argument in economics exists: If it can be sold at a price that the markets wants, it shouldn’t be part of the market.
  9. 9. Pigs may fly Here

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