1. How the World of Business Works
Global Trade
How the World of Business Works

2. Nations trade because…
Economic gain, make money $$
Get access to new markets
Develop international relationships
Help allies
Creates jobs at home
Take advantage of our special situation
Comparative Advantage
Resources, Skills
But, not all nations benefit equally…
Some gain more $$ than others, depends on WHAT they trade
Tech = ↑ $$
Agriculture = ↓ $$

3. How do nations seek advantage?
Specialization = Produce what we are best at & have resources for
Gov’t creates barriers & advantages such as…
Tariffs = tax on imports
Subsidy = $$ paid to help their own industries
Quotas = Limits on imports

4. How did Today’s Global Trade System Emerge?
FREE TRADE movement = open competition, no gov’t barriers
Protectionism failed in 1930s >> Great Depression, led to WW2
WW2 brought change: US gave $ / supplies, rebuild world = US #1
Rebuilding = ↑ US $$ , economic boom
IMF + World Bank created = access to $$ for nation
Trading Blocs created, created allies & partners
GATT = ↑ co-operation between nations

5. What is the global export trend. Why
What is the global export trend? Why? What is the global impact on industry?

6. Globalization: What? Good and Bad?
THE GOOD
World Economy ↑
Prices of goods ↓
Opportunity ↑
Developing Nations ↑ $$
THE BAD
US dominance ↓↓
US trade deficit & debt ↑↑
Industry Winners & Losers
Job Security ↓↓
Culture Blending ??

7. How do Nations Manage Global Trade?
Trade Agreements
BILATERAL = 2 Nations
MULTILATERAL = 3+ Nations
REGIONAL = Continent, Area
Specialize
NAFTA, EU = No Tariffs, etc.
GLOBAL = WTO = 150+ nations
↓ barriers, dumping
↑ fairness, opportunity for all
Fair Trade Movement
= Opportunity for
Big & Small Nations,
Rich & Poorer Nations
↓Gov’t Subsidy, Tariff
Wants EQUAL CHANCES for all to benefit

8. What path should the US follow?