Transcript International Trade and Economic Development

International Trade and
Economic Development
Wednesday 6.1, International Trade and Economic
Development
SWBAT apply concepts of supply, demand, trade, and
comparative advantage to the economies of different
countries.
Agenda
1. Warm Up #5
2. Notes: International Trade
and Economic
Development
3. Work on final project in
groups
Homework
• Notebook Check #4
Thursday-Friday!!!
• Final Projects due June 9
and June 10 and June 13-14
Warm Up #5
1. Look at the tags on your clothes. Where
were they made?
2. Do you think every country gets a fair deal
when they trade? Explain.
3. How does specialization apply to whole
countries, not just individual firms? (recall
comparative advantage- mowing lawns and
washing cars)
Comparative Advantage
• Some
countries have
what other
countries
want
• Exports make up
1/3 of our GDP
U.S. Exports
• Most of those
exports are raw
materials and
aircraft technology
• Nobody really likes
our consumer
goods…
U.S. Imports
• The U.S. imports $2.1
trillion dollars worth
of goods and
resources each year
• Crude oil makes up
17% of our imports
– What does that say
about demand for
gas?
Free Trade Isn’t Free
• Since countries want to
export more than they
import, they try to restrict
the imports as much as
possible
– Tariffs- taxes to make
imports more expensive
– Quotas- a legal limit on how
many goods are imported
Love Dat Tax
• When one country
imposes tariffs and
quotas, another
country will do the
same
• This can lead to
disputes and even
war
Enough with
the tariffs!
Trade Organizations
• GATT (General Agreement of Tariffs and Trade)- exists
to make sure everyone is happy with terms of trade
• The WTO (World Trade Organization) is the big kahuna
in world trade- they oversee the legal stuff
• European Union (est 1958)- free trade among
European Countries
• NAFTA (North American Free Trade Agreement)- free
trade among US, Canada, and Mexico
Developing Countries
• Low per capita GDP
• Low literacy rates
• High unemployment
rates
• Over-population
• Low productivity
• Few entrepreneurs
Industrial Market Countries
•
•
•
•
•
Higher GDP
Benefits from trade
High standard of living
Educated professionals
Capitalist
Convergence Theory
• This theory states
that one day,
developing nations
will catch up with
richer nations
• China
• Singapore
• Brazil