01 intro to-trade


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01 intro to-trade

  1. 2. Syllabus to take us up to Xmas <ul><li>Patterns of trade </li></ul><ul><li>Identify patterns of trade between developed and developing countries. </li></ul><ul><li>Students should be aware of changes in trade flows between countries and the reasons for them , </li></ul><ul><li>for example the potential impact of China and India on world trade patterns and the possible reaction of developed economies. </li></ul>
  2. 4. Volume of world trade merchandise exports & GDP 1950 -2008 Annual % change Use your whiteboard - compare the changes of exports and GDP over from 1950 – 2008 (4 marks)
  3. 5. Volume of world trade merchandise exports & GDP 1950 -2008 Annual % change Use your whiteboard - compare the changes of exports and GDP over from 1950 – 2008 (4 marks) Difference between exports & GDP What type of relationship is there? Is this a volatile or stable market?
  4. 6. Volume of world trade (annual % change) Exports Imports Use your whiteboard - compare the changes for imports and exports from 2000 - 08 (4 marks)
  5. 7. Composition of geographical regions
  6. 8. Trade Groupings <ul><li>This is where countries in various parts of the world come together to form trade groups with varying degrees of formality. </li></ul><ul><li>Their aim is to encourage trade among a group of nations. </li></ul>
  7. 9. Trade groupings <ul><li>ASEAN </li></ul><ul><li>MERCOSUR </li></ul><ul><li>NAFTA </li></ul><ul><li>EU </li></ul><ul><li>CIS </li></ul><ul><li>WTO </li></ul>
  8. 10. ASEAN Trade Group
  9. 12. NAFTA
  10. 14. <ul><li>Commonwealth of Independent states </li></ul>
  11. 15. World Trade Organisation. Everyone in green = member of WTO
  12. 16. Customs Union V Free Trade? <ul><li>Free trade </li></ul><ul><li>Where a group of countries agree to trade without barriers between themselves , but maintain their own individual barriers with countries outside the area. </li></ul><ul><li>Eg NAFTA </li></ul><ul><li>Customs Unions </li></ul><ul><li>This goes further than free trade, which eliminates not only barriers to trade between the member countries BUT also to have a common tariff barrier against the rest of the world. </li></ul><ul><li>Eg The Single Market </li></ul>
  13. 17. Typical Evaluation Q’s <ul><li>To what extent do trade groupings generate increased trade and improve efficiency? </li></ul><ul><li>Requires you to know about…. trade diversion versus trade creation within the context of trade groups! </li></ul>
  14. 18. Trade Diversion <ul><li>When countries within a trade group import from within the partner group countries rather than import from ‘cheaper’ non partner countries. </li></ul><ul><li>This may encourage some of the countries’ industries to remain inefficient rather than compete on a global scale! </li></ul>
  15. 19. Trade Creation <ul><li>This is where the members of the trading group start to specialise in industries that they have a competitive advantage and benefit from economies of scale and improve efficiencies. </li></ul><ul><li>More on this in a later lesson. </li></ul>
  16. 20. Your task – Internet research <ul><li>Using your handout (last 6 slides) of the different world trade groups </li></ul><ul><li>You will be given one trade group to investigate & then share your findings with everyone else…. </li></ul><ul><li>What size is the trade group? </li></ul><ul><li>How many countries are in it? </li></ul><ul><li>When did it start? </li></ul><ul><li>What reasons were given for the start </li></ul><ul><li>Include any other ec data that you can find too. </li></ul>
  17. 21. Suggestions for research links… <ul><li>http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/regions/ </li></ul><ul><li>http://news.bbc.co.uk/1/hi/world/americas/5195834.stm </li></ul><ul><li>http://news.bbc.co.uk/1/hi/world/asia-pacific/country_profiles/4114415.stm </li></ul><ul><li>http://news.bbc.co.uk/1/hi/world/europe/country_profiles/2429503.stm </li></ul>
  18. 22. Next lesson What is world trade & UK data
  19. 23. WORLD TRADE <ul><li>Why is there world trade? </li></ul><ul><li>Natural resources </li></ul><ul><li>Price </li></ul><ul><li>Product differentiation </li></ul><ul><li>political </li></ul>