It’s Time to Trade

SS6E6 The student will analyze the benefits of and barriers to voluntary trade in Europe

a. Compare and contrast different types of trade barriers such as tariffs, quotas, and embargoes

b. Explain why international trade requires a system for exchanging currencies between nations

Class work Assignment

Take out a piece of notebook paper and draw a tree map with three branches.Label your map – Trade BarriersLabel each branch –

Tariff Quota Embargo

Tariffs

Taxes placed on imported goodsMake imported products cost moreIncreases the demand for a lower-priced item produced domesticallyExample: America may charge a tariff on imported cheese to make it more expensive. This would make Americans buy the cheaper, American-made cheese. In the end, by enforcing a tariff, America helps support its farmers and makes more money

Quotas

Put a legal limit on how much of a product can be importedCan cause shortagesCauses prices to riseExample: America may put a quota on how many BMW automobiles can be imported form Germany. This would make the price of BMW cars rise. It would also encourage Americans to buy cheaper, American-made cars. America benefits by selling more locally made cars and Germany benefits by selling more expensive BMWs.

Embargoes

When trade is not allowed between two countriesNo goods can be sold or bought between two countriesLike putting the countries in “Time Out”Example: America as a trade embargo with Cuba. America cannot buy or sell anything from Cuba and Cuba cannot buy or sell anything from America. It is illegal to buy Cuban cigars in America, for example, because they are an import from Cuba

How does the European Union encourage voluntary trade among its members?

The EU was established to set up free trade among countries of EuropeAccounts for 1/5 of the world’s tradeProducts produced in Europe are traded in Europe without tariffsThis free trade leads to tremendous savings for European consumers & businesses

How does the European Union encourage voluntary trade among its members?

In order to protect its members, the EU sets quotas on trade with other nationsThe EU will also embargo imports from foreign countries if that country doesn’t follow quota rulesEmbargoes are also use for safety reasonsThe EU may also embargo imports from countries for political reasons

Quick Quiz

Decide if the examples below represent a tariff, quota, or embargo___ 1. Only 3,000 pairs of American blue jeans can enter France___ 2. The U.S. charges an extra 10 cents per pound on bananas from Costa Rica

___ 3. No Brazilian beef can be sold to Spain.___ 4. Only 10,000 barrel of oil can be delivered from Saudi Arabia to Italy this month.___ 5. The EU will not accept any products from an African nation because its government will not allow free speech or freedom of religion

Your Money = My Money

Working within your group, use CIA Factbook and complete the chartAs a group, complete the questions on the back of the chart. Be prepared to share your answers

Credits

Georgia Experience, 6th Grade Teacher’s EditionThinking Maps – Tree MapGeorgiaStandards.org, 6th grade Framework Unit 3