International Trade ch 24 Unit 7

Exporting and importing Visible exports: Waterford crystal selling products to American shops Dell sells computers made in Ireland to countries abroad Invisible Exports: Ireland selling services to foreign countries. E.G: Tourists who stay in Dublin Hotels U2 tours Oz

Continued - Visible Imports Is Ireland buying products from foreign countries Dunnes buys fruit from Africa, BT buys clothes from Ralph lauren USA. Invisible Imports: Ireland buying services from foreign countries E.G Irish Tourists staying abroad, Foreign Concerts held here in Eire.

Balance of Trade and the balance of Payments Government accounts that show the difference in value of products we imports v export. BT= Vis ex – Vis Imp Balance of payments- includes services and invisible trade . BT = Total exports- Total Imports. When richer i.e exports>Imports then we have a surplus otherwise a deficit. Work out a sum p430 and p443 q5

Countries import because of Resources we don’t have - oil Unsuitable climate - Pineapples Lack of skills – Cars Bigger choice for consumers – Ipad

Why exports? Survival- market not big enough here. E.G Irish market for new drugs vs global Increase sales and profits Diversification – spread the risk. Irish economy is poor but other markets might be performing.

Why is international trade important to Ireland Billions more customers available. More choices. Economies of scale. The bigger you are the cheaper to buy in bulk, production and advertising. Better negotiating powers. Can receive foreign currency and use to pay off imports e.g us dollars More jobs, infrastructure, lower taxes, Competition forces our own companies to improve and brings down prices for customers

Free trade versus Protectionism Can buy and sell with no legal, tax and distribution barriers. – EU Protectionism. Ireland used to be more like this under Devalera. Lessen foreign imports and become more self sufficent. Erect more barriers to trade. E.g’s Taxes like tariffs, add cost onto foreign imports making them more expensive than local products.

More barriers to trade Quota : will only allow a certain amount of imports in. E.G the EU has a quota on Chinese garments into EU Embargo: Complete ban on a particular import: USA bans products from Cuba. Subsidy: Grant to local businesses to help undercut foreign competition.

Changes to International Economy Globalisation Improved ICT More trading blocs NAFTA Deregulation of International Trade – WTO New Markets

Irelands Opportunities EU- More sales Lower Costs – economies of scale Diversification – spread risk diff market Earn Foreign Currency Overcome Trade barriers English Educated workforce Green Image

Ireland’s Challenges Foreign languages - interpretations Exchange rates Distribution Probs – transport costs weather and timetables Cultural differences – acceptable norms? Competition from low wage economies Payment problems

Role of ICT in world trade Increased sales due to efficiencies and e- commerce world wide 24hrs7 days a week open shop. Advertising: Ads google and page ranking Faster and cheaper communications emails and quick online updating of sop and pop. Decision making info on topics ,on markets, opportunities Reduced costs : video conferencing time and expense

Government help Irish exporters by Enterprise Ireland – advise, market research, funding, low cost loans, training courses, customisation Department of Enterprise trade and employment – docs for foreign trade, regulations advise, export credit insurance (gov pays if the Irish exporter doesn’t get paid) Diplomatic services; promotions, lobbying governments and companies to trade in ireland, to resolve problems that arise for our companies abroad, trade missions with irish president, trade fairs (orders are signed and irish companies attract publicity.

Questions Difference between invisible imports and visable exports? Balance of trade vs the balance of payments? Why is international trade nb? What are the changes to the international economy? Protectionism vs free trade? Barriers to trading discuss Opportunities and challenges for Ireland and I.T? How does the government help?

Conclusions Visible and invisible imports and exports – Balance of payments Globalisation, Consolidation, Deregulation. Why important for Ireland Free trade Capitalist versus Protectionist Chinese model. Michael Mooreoore dvd about capitalism- notes Opportunities and challenges for Ireland internationally. ICT and Gov roles