What does this cartoon tell you about trade?

New Unit: Global Interdependence

Global TradeObjectives:1.To examine the nature of global trade patterns.2.To understand what is meant by the term ‘trading bloc’ and name trading blocs.3.To research one ‘trading bloc’.

When did trade begin?

Modern international trade began with European countries using raw materials found in their colonies.

Why do we trade with other countries?Trading results from the uneven distribution of raw materials over the Earth’s surface. Important for all countries as none are totally self-sufficient.

Complete the worksheet on Trade Flows from 2006.

Trading Blocs• During the later part of the 20th century countries grouped

together to try to increase the volume and value of their trade.• Two of the earliest and largest trading blocs are the EU and

NAFTA, each of which has an internal market of 500 million people.

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+ By creating trading blocs, countries eliminate custom duties between member states therefore reducing the cost of products sold between them.+ EU countries became more competitive against non-member countries such as Japan.

- Has meant it is increasingly difficult for LEDCs to sell their products to MEDCs, increasing the trade and development gap

Homework

• Research into Trading Agreements and Trading Blocs:1. GATT WTO – Ashvin & Jonnie2. OECD – Josh & Aaron3. NAFTA – Hannah & Zac

• What it stands for?• When it was set up?• Why it was set up?• Who is involved?• What does it do?

Using p387-388 in Nagle & p624 Waugh answer the following questions:

1. What is ‘visible’ and ‘invisible’ trade?2. What is the ‘balance of trade’ and how is it ‘different to the

balance’ of payments?3. How do import and export patterns differ between MEDCs

and LEDCs?4. Explain what it means for a country to have a trade surplus

or trade deficit.5. What is ‘protectionism’? Give example of how it controls

trade.6. Draw a table to show the advantages and disadvantages of

protectionism.