4.A.INTERNATIONAL TRADE

  • Explain the gains from trade.
STARTER: WHAT IS GLOBALIZATION?
Lesson 1: using pages 259 -261 of Oxford or 354-355 in Tragakes complete the workbook section 3.1, when you have finished read the articles below and add to your RWE excel table.

Why Ford And Other American Cars Don't Sell In Japan

Some of the top-selling car brands in the United States are Japanese - Toyota, Honda, and Nissan especially. But the reverse isn't true - General Motors, Ford, and Fiat Chrysler combined make up only .3% of the Japanese auto market.

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A healthy re-examination of free trade's benefits and shocks

ECONOMISTS have long argued that free trade makes everyone richer. But lately that view has come under attack, most notably from President Donald Trump. Economists are asking themselves some tough questions. Is free trade always a good thing? Do the losers from free trade need to be compensated?

What governments can do for the losers from free trade

Jared Bernstein is a senior fellow at the Center on Budget and Policy Priorities. Previously, he was chief economist and economic adviser to Vice-President Joe Biden and executive director of the White House Task Force on the Middle Class. In 1995-96, he was Deputy Chief Economist at America's Department of Labour.

Chinese Burn Will Only Make the Solar Industry Stronger

Remember how there was a glut of computer chips in 2008, and then the world stopped using computer chips? Yeah, me neither. That's a good reason to discount your worries about the effects on solar power from recent policy blows on panel manufacturers by the U.S. and Chinese governments.

TTIP: Might is Right

The Transatlantic Trade and Investment Partnership, or TTIP, is a free trade agreement currently under negotiations between Europe and the United States....
ACTIVITY: THE ATLAS OF ECONOMIC COMPLEXITY
Choose two countries, one low-income and one high income economy to compare and contrast trade. What are the main features of trade for each country and how are their trade patterns different fromeach other?

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The theory of Comparative advantage
  • Explain the theory of absolute advantage. 
  • Explain, using a diagram, the gains from trade arising from a country's absolute advantage in the production of a good.
  • Explain the theory of comparative advantage. 
  • Describe the sources of comparative advantage. 
  • Draw a diagram to show comparative advantage. 
  • Calculate opportunity costs from a set of data in order to identify comparative advantage. 
  • Draw a diagram to illustrate comparative advantage from a set of data.
  • Discuss the real-world relevance and limitations of the theory of comparative advantage.
How: Be able from a set of data to demonstrate the theory of comparative advantage.
Using a range of resources critique the theory of comparative advantage.
Activities:
1. Work through the blink and dolton resources from last lesson and ensure that you have marked them.
2. Complete the kognity.
3. If you need any further support on the theory complete the comparative advantage section in the workbook above.
4. Read some of the articles below to help you critique the theory and pages 361-362 (Tragakes)
5. Complet the past paper sections on Comparative Advantage. This should be completed by 1a tomorrow.

This week in comparative advantage

SADLY, the article is behind The Atlantic's paywall, but Clive Crook's essay on the the puzzle of why scepticism about free trade seems to be waxing despite the fact that there is no new theory or evidence undermining the traditional economic consensus on the benefits of trade is worth at least a few minutes loitering in the magazine s...

Why trade is good for you

ECONOMISTS are usually accused of three sins: an inability to agree among themselves; stating the obvious; and giving bad advice. In the field of international trade, they would be right to plead not guilty to all three. If there is one proposition with which virtually all economists agree, it is that free trade is almost always better than protection.

The boomerang effect

THIRTY YEARS AGO Shenzhen was little more than a village, abutting the border of Hong Kong's New Territories. When China's first Special Economic Zone was established in the early 1980s, workshops started to grow and glistening skyscrapers began to rise up. Its population is now around 12m, including perhaps 6m migrant workers.

A trade economist wins the John Bates Clark medal

IN 1853 the government of India, then directed by Britain's East India Company, began construction of a vast rail network, continued by the British Raj, established in 1858. At the time, most inland transport in India was hauled by draught animals: with carts where roads existed and were passable; packed on animals' backs when they were not, which was often.

IB Economics 2014 Exams : simplebooklet.com

IB Economics 2014 May and Nov Exams

The world Trade organisation (wto)
What: To understand the functions, objectives and principles of the WTO.
DQ: How much free trade is desirable?
HOW: Research  and post to the forum.
Which Driving Questions do you think might apply to the World Trade Organization?

World Trade Organization - Global trade

Global trade - The World Trade Organization (WTO) deals with the global rules of trade between nations. Its main function is to ensure that trade flows as smoothly, predictably and freely as possible.

Who elected the WTO?

UNSURPRISINGLY, sceptics extend many of the criticisms they make of the IMF and the World Bank to the World Trade Organisation as well. If anything, they detest the even more. Perhaps this is because, unlike the Fund and the Bank, the WTO brings what many critics regard as the most objectionable aspects of globalisation home to the rich countries, where most of those critics live.

Is there any point to the WTO?

SUPACHAI PANITCHPAKDI, the softly spoken director-general of the World Trade Organisation (WTO), steps down this month with precious little to shout about. Not so long ago, he was hoping to announce a breakthrough in the Doha round of trade talks, which must agree on a template for cutting tariffs and subsidies at a big ministerial meeting in Hong Kong this December.

As WTO members meet in Argentina, the organisation is in trouble

"EVERYBODY meets in Buenos Aires," said Cecilia Malmstrom, the European Union's trade commissioner, days before heading there for the World Trade Organisation's (WTO) biennial gathering of ministers, which opens on December 10th. Some non-governmental organisations have been blocked by the protest-averse Argentine authorities, but a meeting of people will indeed take place.

free trade and tariffs (FOCUS ON DIAGRAMS AND OUTCOMES)
  • Explain, using a tariff diagram, the effects of imposing a tariff on imported goods on different stakeholders. 
  • Explain, using a diagram, the effects of setting a quota on foreign producers on different stakeholders. 
  • Explain, using a diagram, the effects of giving a subsidy to domestic producers on different stakeholders. 
  • Describe administrative barriers that may be used as a means of protection. 
  • Evaluate the effect of different types of trade protection. 
  • Discuss arguments in favour of trade protection.
  • Discuss arguments against trade protection.
  • Calculate, from diagrams, the effects of imposing a tariff on imported goods. 
  • Calculate, from diagrams, the effects of setting a quota. 
  • Calculate, from diagrams, the effects of giving a subsidy.
WHAT: TARIFF EFFECTS
HOW: BE ABLE TO CONFIDENTLY ANNOTATE A TARIFF DIAGRAM AND EXPLAIN THE WELFARE EFFECTS

Nigeria hopes high tariffs will make it grow more rice

STANDING ankle-deep in water between neatly spaced rice plants, an instructor shows a group of about 100 farmers in Kebbi, a state in north-west Nigeria, how to apply herbicide. The training session, arranged by TGI Group, a Nigerian conglomerate that runs a large rice mill nearby, has an enthusiastic audience.

President Trump's tariffs have united his opponents at home and abroad

"HOW am I going to compete?" asks Sohel Sareshwala. He runs Accu-Swiss, a Californian company making customised components for the manufacture of semiconductors and cars. President Donald Trump's tariffs on steel and aluminium, both of which he uses as inputs, are eating into his profit margins and delaying his orders.

How open is America?

"JUSTIN has agreed to cut all tariffs and all trade barriers between Canada and the United States," claimed President Donald Trump to laughter on June 8th, at the G7 summit in Quebec. The next day, in apparent seriousness, Mr Trump-who has slapped tariffs and quotas on imports of aluminium and steel from all the G7 countries, and others-called for unfettered trade within the group: "No tariffs, no barriers.

Donald Trump stomps on Canada's economy

ALL dishes on the lunch menu at La Cantine du Centre-Ville, a pop-up restaurant near Parliament Hill in Ottawa, are made from ingredients that annoy Donald Trump. The Mini-Quiche aux Trois Fromages uses Canadian eggs, milk, cheese and chicken "bacon"; the Galette de Saucisse de Dinde is made with turkey.
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Quotas (fOCUS ON DIAGRAMS AND OUTCOMES)

Donald Trump mulls restrictions on steel and aluminium imports

TEN months ago the Trump administration took aim at steel and aluminium imports, giving itself a year to decide whether they threatened national security and, if so, what to do about it. On February 16th it concluded that America is indeed under threat. The president has until mid-April to choose whether to respond.

Unshackling Europe's sugar producers

IN A rickety warehouse on the banks of London's Thames sit mountains of caramel-coloured raw cane-sugar. For centuries the sweet stuff has come across the seas to Tate & Lyle Sugars' dockside factory, to be refined into the white stuff. Cane accounts for four-fifths of global sugar production, but only one-fifth of Europe's.

Subsidies

Unpicking cotton subsidies

AMERICAN unilateralists sometimes liken the United States to Jonathan Swift's Gulliver: a benign giant tied down by multilateral agreements, much as Gulliver was tied down by the diminutive Lilliputians. On Monday April 26th, the Lilliputians succeeded in fastening another restraint to the giant they distrust so much.

The hidden persuaders

LAST SUMMER FRED HOCHBERG, head of America's government-backed Export-Import Bank, joined the chief of Westinghouse on a sales trip in the Czech Republic. A Czech official, he recalls, told him they would not even consider Westinghouse's bid to expand a nuclear power plant without finance from his bank.

Progress at last, but still a long way to go

The European Union and the United States have agreed to remove agricultural export subsidies and to reduce other farm subsidies in a deal that rescues the Doha round of world trade talks. However, the details of the deal remain to be negotiated
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COMPARING AND CONTRASTING AND EVALUATING TRADE BARRIER EFFECTS
​Utilizing either Tragakes (364-379) or Oxford () evaluate the impacts of Trade Barrier Effects. If you are a Higher Level student you must also ensure that you include the calculations for each stakeholder. 

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ARGUMENTS FOR TRADE PROTECTION
Read through the pages in Tragakes (377-379) and create a spider diagram of the reasons that favor trade protection.
 TRADE PROTECTION ASSESSMENT (8 Marks)