Unit 8 Day 1 Concepts of Trade

Trade Trade – the act of buying or selling goods and services. Trade – the act of buying or selling goods and services. Why do nations trade? they trade with each other nations when, on their own, they do not have the resources or capability to satisfy their own needs and wants. Why do nations trade? they trade with each other nations when, on their own, they do not have the resources or capability to satisfy their own needs and wants. Economic Interdependence – the participants in an economic system are dependent on others for the products they cannot produce efficiently for themselves Economic Interdependence – the participants in an economic system are dependent on others for the products they cannot produce efficiently for themselves

Imports vs Exports Imports are products brought into the US from another nation. Imports are products brought into the US from another nation. Exports are products shipped out of the US to another country. Exports are products shipped out of the US to another country. The US trades the most w/ Canada NOT China The US trades the most w/ Canada NOT China

Nations the US trades with

US Imports and Exports US Imports by country US Imports by country US Exports by county US Exports by county

World Trade Organization WTO - An international organization, which sets the rules for the global trading system and resolves disputes b/t its member states. WTO - An international organization, which sets the rules for the global trading system and resolves disputes b/t its member states. They’re 149 nations that are members including the US. They’re 149 nations that are members including the US. Created: January, 1, 1995 Created: January, 1, 1995 Headquarters: Geneva, Switz. Headquarters: Geneva, Switz.

WTO Continued World Map showing WTO Membership Functions: - Administering WTO trade agreements - Forum for trade negotiations - Handling trade disputes - Monitoring national trade policies - Technical assistance and training for developing countries - Cooperation with other international organizations

European Union EU - is an economic and political union of 28 member states that are located primarily in Europe. EU - is an economic and political union of 28 member states that are located primarily in Europe. The EU operates through a system of independent institutions and intergovernmental negotiated decisions by the member states. The EU operates through a system of independent institutions and intergovernmental negotiated decisions by the member states. They’re NO trade barriers – meaning all 28 nations trade w/ each other for FREE in 24 different languages. They’re NO trade barriers – meaning all 28 nations trade w/ each other for FREE in 24 different languages.

The Euro – a single currency for 17 European countries EU countries using the euro EU countries not using the euro Can be used everywhere in the euro area  Coins: one side with national symbols, one side common  Notes: NO national side

EU Member States Members: Austria, Belgium, Bulgaria, Croatia, Republic of Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden & the UK.

Specialization Specialization – the production of one or just a few goods & services. In other words, it refers to how an individual, organization, state or country focuses available resources. Instead of attempting to produce & sell many different products, nations use overstock to trade for what they may lack. The system of international trade uses the concept of specialization. One country may have the resources to produce avocados at a low cost. Another country may choose to specialize in cheese. Each produces more than what they need in order to obtain other goods at a lower cost Specialization – the production of one or just a few goods & services. In other words, it refers to how an individual, organization, state or country focuses available resources. Instead of attempting to produce & sell many different products, nations use overstock to trade for what they may lack. The system of international trade uses the concept of specialization. One country may have the resources to produce avocados at a low cost. Another country may choose to specialize in cheese. Each produces more than what they need in order to obtain other goods at a lower cost

Specialization in NC NC is known for: NC is known for: Agriculture (animals and crops) Agriculture (animals and crops) Manufacturing Manufacturing Mining Mining Fishing Fishing Services Services

Specialization by State

The US in the World Economy The US has the largest world economy and also Imports/Exports more goods/services than any other nation. – NOT TRUE- #2 now behind CHINA The US has the largest world economy and also Imports/Exports more goods/services than any other nation. – NOT TRUE- #2 now behind CHINA However, the US economy is doing affects the rest of the world. When our economy is up the rest of the world thrives; when it’s down other world markets decline. However, the US economy is doing affects the rest of the world. When our economy is up the rest of the world thrives; when it’s down other world markets decline.

NC in the World Economy Highlights of NC’s Export Activities: Highlights of NC’s Export Activities: Exports support 347,000 jobs in NC and contribute $30.5 billion to the state’s economy. Exports support 347,000 jobs in NC and contribute $30.5 billion to the state’s economy. The International Trade Division assisted 265 NC companies w/ more than 470 business requests for export assistance in The International Trade Division assisted 265 NC companies w/ more than 470 business requests for export assistance in The total value of all goods exported by firms in NC in 2009 was $22 billion, ranking 16 th among the 50 states. The total value of all goods exported by firms in NC in 2009 was $22 billion, ranking 16 th among the 50 states. W/ support from the General Assembly, the NC Dept of Commerce opened a new foreign office in China, in W/ support from the General Assembly, the NC Dept of Commerce opened a new foreign office in China, in Secretary Keith Crisco, and other economic development professionals participated in a successful trip to Asia (China and Japan) to develop long-term business partnerships. Secretary Keith Crisco, and other economic development professionals participated in a successful trip to Asia (China and Japan) to develop long-term business partnerships. In early 2010, the Dept of Commerce organized business recruitment trips to Brazil and Germany, and is currently planning an economic development trip to India. In early 2010, the Dept of Commerce organized business recruitment trips to Brazil and Germany, and is currently planning an economic development trip to India.

NC Exports by Industry In 2009, more than a quarter of NC exports were chemicals, including pharmaceutical products, plastics, and fertilizers. Chemicals have been NC’s leading export industry since Other major exports include: computers and electronics, transportation equipment, machinery and textiles.

Unemployment Unemployment – the state of being unemployed. Unemployment – the state of being unemployed. Current unemployment rate in US: around 5% - which = around 10.5 million Americans Current unemployment rate in US: around 5% - which = around 10.5 million Americans Local info - Concord, NC Unemployment Rate Local info - Concord, NC Unemployment Rate

U8 D1 Questions: Select 3 of the following 6 questions and answer EACH question in at least 25 words 1.Why does the US trade w/ other world nations? 2.What is the difference b/t an import & an export? Which is better for a nation to do more of & why? 3.How do nations use specialization for financial gain? 4.Explain why does the average American household NOT have many US made products. 5.What traits in world trading make the US important in the global trading game? 6.How does NC affect US & global trade?