Bell Ringer List products that you are able to enjoy because the United States allows international trade with other countries.

Chapter 6.1 International trade The Global Marketplace

What You’ll Learn The interdependence of nations. The benefits of international trade. How government is involved in international trade What balance of trade is What trade barriers are The significance of trade agreements and alliances

Defining International Trade International trade involves the exchange of goods and services between nations. Imports – goods and services purchased from other countries. Exports – goods and services sold to other countries.

Interdependence of Nations Absolute Advantage – when a country has special natural resources or talents that allow it to produce an item at the lowest cost possible. Comparative Advantage – the value that a nation gains by selling the goods that it produces most efficiently. Benefits

Government Involvement in International Trade Balance of Trade – trade surplus, difference in value between exports and imports of a nation. Trade Barriers: ◦ Tariffs – a tax on imports ◦ Quotas – monetary value of a product that may be imported ◦ Embargoes – a total ban on specific goods coming into and leaving a country

Trade Agreements and Alliances The World Trade Organization (WTO) – a global coalition of 135 governments that makes the rules governing international trade. North American Free Trade Agreement (NAFTA) – an international trade agreement among the United States, Canada, and Mexico. European Union (EU) – Europe’s trading bloc. The goal of EU is to encourage economic integration as a single market.

Quiz 1. True or False. The International Trade involves the exchange of goods and services between nations. 2. True or False. Government involvement in International Trade is based on balance of trade, trade barriers, and trade agreements and alliances. 3. True or False. The World Trade Organization is a global coalition of 135 governments that makes the rules governing international trade. 4. True or False. North American Free Trade Agreement in a national trade agreement. 5. True or False. The European Union goal is to encourage economic integration as a single market.