Unit 27 International TradeTeaching Aims:

This unit aims to help learners to understand the basic concepts and ideas in international trade, and to learn some words and expressions used in the field of international trade; to raise the ability of the learner to analyze some cases take place in international trade.

Time requirement :

This unit is to be finished in 6 hours.

1The growth of international tradela Discussion

Consider the clothes and shoes you are wearing, and those you wore last weekend.

Where were they made?

Try to recall the meals you've eaten in the last 24 hours. How much of the food came from abroad?

If you have them, where do your car, television, stereo, camera, watch, and so on come from?

Where was the last DVD or CD your bought manufactured?

Can you even imagine living in a country that did not import anything, where only locally produced food and textiles and products were available?

1b VocabularyMatch up these words and expressions with the definitions below.

 autarky balance of payments balances/trade

barter or counter-trade deficit

dumping invisible imports and exports

protectionism quotas surplus

tariffs visible trade (GB) or merchandise trade (US)

1 trade in goods

2 trade in services (banking, insurance, tourism, and so on)

3 direct exchanges of goods, without the use of money

4 the difference between what a country receives and pays for its exports and imports of goods

6 the (impossible) situation in which a country is completely self-sufficient and has no foreign trade

7 a positive balance of trade or payments

8 a negative balance of trade or payments

9 selling goods abroad at (or below) cost price

10 imposing trade barriers in order to restrict imports

11 taxes charged on imports

12 quantitative limits on the import of particular products or commodities

1c Reading

Read the text and answer the following questions.

1 Why do most economists oppose protectionism?

2 Why do most governments impose import tariffs and/or quotas?

3 Why were many developing countries for a long time opposed to GATT?

4 Why have many developing countries recently reduced protectionism and increased their international trade?

1d Comprehension

Write questions, relating to the text, to which these could be the answers.1 Factors of production, most importantly raw materials, but also labour and capital, climate, economies of scale, and so on.

2 Because it doesn't explain why the majority of the exports of advanced industrialized countries go to other very similar countries.

3 A recently developed one, that has not yet grown to the point where it benefits from economies of scale, and can be internationally competitive.

4 Unlike quotas, they produce revenue.

5 Unlike tariffs, you know the maximum quantity of goods that will be imported.

2 Free trade and unemployment

You will hear Ajit Singh, Professor of Economics at Cambridge University, talking about free trade and unemployment.

2a listening

Listen to the first part of the interview, and then listen a second time and complete the following sentences.

1.Formerly, the less developed countries were against free trade because___

2.Countries like South Korea and Malaysia are competitive today because they've been able to ____

3 Free trade is disruptive; in other words ____________

4 The advantage of free trade is that___________

5 People in industrial countries can only put up with the disruption caused by free trade if________

2b Listening

Listen to the second part of the interview and answer these questions.

1 What would African countries need to do if they wanted to develop a car industry?

2 What does Ajit Singh say could lead to full employment in the rich countries?

3 What does he say will be the consequence if mass unemployment continues?

4 Does he foresee an end to mass unemployment?

2c Discussion

1 What does your country import?

2 What are your country's major exports? Which countries are its major trading partners?

3 Which 'uneconomic' (or internationally uncompetitive) sectors, if any, do you think should be protected in your country?

4 Would total free trade result in the creation of jobs, or in unemployment, in your country?

2d Vocabulary

There is a logical connection among three of the four words in each of the following groups. Which is the odd one out, and why?

1 absolute advantage - barriers - comparative advantage - free trade 1 autarky - counter-trade - invisible trade - visible trade

3 balance - deficit - dumping - surplus

4 banking - insurance - merchandise - tourism

5 comparative advantage - protectionism - quotas – tariffs

6 non-tariff barriers — norms - quotas - taxes

7 barter - import substitution - infant industries - tariff barriers

8 debt - reschedule - rollover - trade

9 liberalize - protect - subsidize - substitute

3 Case study: The banana wars

1 Insert the following words in the spaces in the text below.

although as consequently

due to for example furthermore

however in other words

moreover nevertheless

whereas yet

2 The text above is clearly defending the system whereby Caribbean banana producers export their crop to Europe at slightly above the world market price, and opposing the US position, which demands entirely free trade. Do you agree?

3 Prepare a short talk EITHER defending free trade, OR defending the right of the EU to indirectly subsidize Caribbean banana producers.