1. SS7E6
I can explain how voluntary trade benefits buyers and sellers in Southwest Asia.

2. What’s Your Specialty? (A)
If one country has something another country wants, the opportunities for trade begin to unfold.
Specialization encourages trade among countries because no country produces everything it needs.
The country selling the product makes a profit, and the country buying the product gets what it needs.

3. What’s Your Specialty? (B)
In the Middle East, if a country has oil to export, there are plenty of customers to buy it.
Saudi Arabia, Iran, Iraq, and Kuwait export millions of barrels of oil every day.
The United States imports oil from the Middle East because it does not have enough for the country’s needs.
In turn, the U.S. exports food, medicine, and raw materials to the Middle East.

4. What’s Your Specialty? (C)
Having a more diversified economy, Turkey exports coal, textiles, and some food to European countries.
Those countries then export needed transportation materials to Turkey.
Israel imports rough diamonds and exports the finished product: cut and polished diamonds.

5. Trade Barriers
Countries sometimes set up trade barriers to restrict trade because they want to produce and sell their own goods. Trade barriers include:
Tariffs
Quotas
Embargoes

6. Tariffs
Tariffs are taxes on imported goods which cause the consumer to pay a higher price for an imported item.
Demand is then increased for the lower-priced item produced at home.
In 2008, Saudi Arabia and Egypt lowered tariffs on food imports to help their citizens cope with rapidly rising food prices.

7. Quotas
Quotas are restrictions on the amount of a good that can be imported into a country.
Putting a quota on a good creates a shortage, which causes the price of the good to rise and makes the imported goods less attractive for buyers. This encourages people to buy domestic products, rather than foreign goods.
EXAMPLE: Brazil could put a quota on foreign made shoes to 10,000,000 pairs a year. If Brazilians buy 200,000,000 pairs of shoes each year, this would leave most of the market to Brazilian producers

8. Embargos Embargos forbid trade with another country.
After the September 11th, 2001 terrorist attacks on the United States, the United Nations placed an arms embargo on Afghanistan.
Members of the UN could not sell weapons to Afghanistan, because of the violent group in charge of the government.

9. OPEC (A) Organization of Petroleum Exporting Countries
Created in 1960 by 5 oil rich countries (Iran, Iraq, Saudi Arabia, and Venezuela)
OPEC states it has two purposes:
to coordinate and unify petroleum prices in order to promote stability in the world market
And ensure a regular supply of petroleum to other countries
OPEC sets the price and amount of oil produced by its members
OPEC has a lot of control over
gas prices

10. OPEC (B)
Before 1960, oil production was greater than demand, so oil prices were lower.
After OPEC was formed, demand for oil increased, so oil prices rose.
OPEC currently has 12 members.
OPEC has a lot of power and has used oil as a political tactic.

11. OPEC (C)
In 1973, OPEC stopped exporting oil to countries that supported Israel in the Arab-Israeli War of 1973.
This caused gasoline shortages in the U.S. and many other countries. In the U.S. prices quadrupled, gasoline had to be rationed, and it was the beginning of the government policy to reduce dependence on foreign oil.

12. Currency Exchange Currency is the type of money a country uses
International trade requires a system for exchanging currency between nations. This is called the exchange rate and it is updated daily.
Foreign Exchange-money from one country must be converted into the currency of that country to pay for goods in that country.