Unit 7 TRADE International Trade Vocabulary Free Trade

Unit 7 -TRADE • • International Trade Vocabulary Free Trade Barriers Trade Agreements Global Developments United Nations Human Rights

INTERNATIONAL TRADE VOCABULARY • Import – a product purchased from another country. • Export – a product sold to another country. • Global interdependence – idea that countries of the world are growing increasingly dependent on one another. • Comparative advantage – ability of one country to produce a product at a lower opportunity cost than another country. • Favorable balance of trade – a country exports more than they import. Foreign trade is profitable to the nation. • Unfavorable balance of trade – a country imports more than they export. Foreign trade loses money for the nation.

FREE TRADE Arguments For Free Trade 1. Increased competition = improved products. 2. Trade restrictions damage export industries. 3. Specialization and comparative advantage lowers prices. 4. Greater political cooperation.

TRADE BARRIERS • Protectionism – idea that country should impose barriers to international trade in order to protect domestic industries. Arguments Against Free Trade 1. Job security is threatened. 2. Protection of nation’s economic security is needed. 3. Protection of infant industries is needed. • • Trade Barriers Tariff (protective, revenue) Quota – a limit on the value or number of products to be brought in from another country Embargo – a refusal to trade with another country. Trade Cartel – a group of nations band together to control the supply & price of a product. (OPEC) OPEC COUNTRIES

TRADE AGREEMENTS • NAFTA – North American Free Trade Agreement (US, Canada, Mexico) • CAFTA – Central American Free Trade Agreement (US, Central American Countries • WTO – World trade Organization – app. 150 nations seeking to increase trade and limit trade barriers. • EU – European Union – 27 European countries have created a single economic entity.

Global Developments Protectionism – idea that a country wants to prevent free trade to safeguard the jobs, and the overall economy. Developed Country – a country which is highly industrialized, with high levels of technology, and a large middle class. Developing Country – a country which is transitioning from a more traditional economy to an industrialized nation. There are various levels of developing nations. Arguments for Supporting Development 1) Higher per capita GDP. 2) Opens markets to sell goods and services. 3) Promotes democracy. Issues for Supporting Development 1) Environmental protection. 2) Protection of Domestic Jobs.

United Nations • Internationalism – nations should cooperate to promote common aims, such as supporting economic development and fighting terrorism. Goals of the United Nations • Promote peace • Provide aid to nations • Promote & Protect Democratic Elections • Prevent Violence • Provide aid to Refugees Globalization • Interdependence and interaction among individuals and nations working across barriers of distance, culture, and technology. Global Issues 1) Environmental Destruction 2) Economic Inequality

Human Rights Declaration of Human Rights Protection of Rights 1) – – 2) Similar to US Bill of Rights Additions – freedom of movement, right to asylum, right to nationality, right marry/family, own property Raising Standards of Living – – 1) 2) Includes - right to security, right to work, equal pay for equal work, right to form and join trade unions. Additions – standard of living acceptable for health and wellbeing, right to education Human Rights Violations Genocide – deliberate killing of members of a racial or cultural group. (Nazi Germany, Rwanda) Apartheid – separating people based on race or ethnicity. (South Africa, Similar Issues in Southern United States – Jim Crow Laws)