1. Trade Theories
16th Century Mercantilism: Governments ensuring trade surplus by controlling imports
16th Century Mercantilism theory
Absolute Advantage (Adam Smith)
Comparative Advantage (David Richardo)
19th Century onwards
Factor Proportions Theory (Heckscher & Ohlin)
Country Similarity Theory (Steffan Linder)
Global Horizons Theory
Product Life Cycle (Vernon)
New Trade Theory
Ownership Advantage Theory (S.Hymer)
Internationalisation Approach (Buckley and Casson)
Global Strategic Rivalry theory
Porter’s National Competitive Advantage (diamond) theory
Internalisation Theory
Eclectic Theory (John Dunning)
21st Century Free Trade:
Countries specialised for strategic advantage & trade freely

2. Purposes of Trade Theories
Stakeholders
What? Who? Where?
Why?
How?
Conditions
Approaches
More emphasis by recent theories

3. Discuss & Share your assignment response strategies
Assignment 1 Planning
As exemplified by the European Union (EU), regional economic integration is replete with political, economic & cultural danger. Discuss through the use of valid, real-life examples.
Simply put
As seen in the case of the EU, regional economic integration is replete with political, economic & cultural risks & issues
Discuss & Share your assignment response strategies

4. What regional economic integration? 2 1 What is EU?
As exemplified by the European Union (EU), regional economic integration is replete with political, economic & cultural danger. Discuss through the use of valid, real-life examples.
What regional economic integration? 2 1
What is EU?
What 2351 topics’ concepts & theories can U use? 3
What’s the link? 4
What are the Risks & Issues?
Note:
Risks are anticipated problems that have not occur yet
Issues are eventuated risks

5. What 2351 topics’ concepts & theories can U use?
IB organisation
Roles & Strategic Approaches
Week 2
PLE Systems
Week 5
OB Regulatory Framework
Week 4
IB Trade Theories
Week 3
Social System - Culture
Week 7
Inter Nation
Cooperation
IB Evolution,
Concepts & Methods
Development
Week 6
MNC & FDI IB
PESTLE Systems
Makeup
Week 8
ForEx & IMS
Week 9
IB firms’strategies
& structures
IB Governance & Market Systems
Week 10
IB firms’ Entry
Modes
Week 11
Globalisation & IB

6. Assignment Development Activities
Planning,
Literature Search
& Developing working papers
Planning how to do?
Action planned tasks
Writing planning
& development
Plan your report structure
Are U able to show U followed the assessment criteria?
Write, edit & proof read your report

7. Assignment 2: Group Presentation
Starts next week…………..
Important Instructions to be followed:
Answer the chosen week’s questions
Must show application of relevant 2351 concepts, theories, etc
Must elaborate or support answers with real-life examples (ie cases)
On day of presentation must hand in hard copies of:
Presentation with group members’ ID and name details and clarifying who is presenting which question
Each group member’s peer evaluation form (downloaded from Moodle)
Evaluation sheet for tutor, completed with names and topic title
Presentation tips:
Important assessment criteria:
Contents & structure
Visual aids & supporting materials
Verbal communications & body language
Analysis & Critical Thinking Skills
Audience and Q&A interactions
Other

8. Discussion Qs
16th Century Mercantilism: Governments ensuring trade surplus by controlling imports
Can Mercantilism apply in today’s world?
2. Is Free Trade fair?
Examine its cost-benefits
Examine its winners & losers
21st Century Free Trade:
Countries specialised for strategic advantage & trade freely

9. The Rise of Bangladesh’s Textile Trade Case Study
Bangladesh's textile industry – 1.51 m
Ethnical Textiles – 3.31m
Martin Jacques - When China Rules the World – m
Source: The Hindu, Dec 20, 2012
Why was the shift to a free trade regime in the textile industry good for Bangladesh?
Who benefits when retailers in the US source textiles from low-wage countries suh as Bangladesh?
What international trade theory or theories best explain the rise of Bangladesh as a textile exporting powerhouse?
How secure is Bangladesh ‘s textile industry from foreign competition? What factors could ultimately lead to a decline?

10. Bangladesh's textile industry – 1.51 m
The Benefits
The POSITIVES:
Capital Formation
Technology Transfer
Regional & Sectoral Development
Internal Competition & Entrepreneurship
Favourable Effect on Balance of Payments
Increased Employment
Bangladesh's textile industry – 1.51 m
At What Costs?
At Whose Costs?

11. Bangladesh has the advantage of not being China
The argument focus is Cost Advantage
Bangladesh
China
Low cost factors
Is the largest world’s exporter  sunk FDI
But still MNC have concerns of increasing cost factors
China
Martin Jacques - When China Rules the World – m
The long version – 1.34 hrs

12. The Costs The NEGATIVES: Industrial dominance
Exploitation of raw materials + cheap labour
Bribery and corruption
Interference in political matters
Technological dependence
Disturbance of economic plans
Cultural change
Interference by home government through MNC
Degree of government control may be less than intended
Technology transfer may be too expensive or inappropriate (eg old)
Can move out when country regulates
Products are for overseas markets and may not benefit local social needs or value
MNC’s home country’s labour /employment interests are undermined
Avoid taxes
Best jobs given to MNC’s privileged people
Ethnical Textiles – 3.31m