INTERNATIONAL TRADE, cont.

+ * EU*

RB, p 45-55

MK, U 27

READING: RB, p 45PROTECTIONISM AND FREE TRADE, cont.

After reading the specified paragraphs

match with headings 1&2 3-5

Organizations promoting free trade

Reasons for protectionism

Economic reasons for free trade

Problems of developing countries

Collocations from pgs 1 & 2

rai______ living standard

spe______ in the production

c________ advantage ___ producing...

fac______ of production

natural r_________

div_______ of labour

ec_______ of scale

Collocations from pgs 1 & 2raise living standard

specialize in the production

comparative advantage in producing...

factors of production

natural resources

division of labour

economies of scalePairwork: Practice talking about economic reasons for practicing free trade / trade liberalization(use the phrases above, propose further phrases)

Free trade vs. Protectionism

• International trade (imports and exports) without government r__________

• Trade of goods and services without trade b_______

• Protection of d________ industries against foreign c________

• Government restrictions are placed on the i______ of foreign competitors

(tarrifs, quotas and subsidies)

estrictions

arriers

omestic

ompetition

mports

Reasons forTRADE LIBERALIZATION

• spe_______n• a______e/c________e

advantage• a_____s to markets • intern. c________n &

efficiency• efficient market

m_________m• freer m________t of

resources• f______m to choose

TRADE LIBERALIZATIONvs. PROTECTIONISM

(reasons for) (reasons for)

• protect jobs (v____s)• protect d_______c ind.• strategic reasons

– i_____t industries

• political p______e• protect culture (?)• r______e• prevent d________g

• specialization• absolute/comparative

advantage• access to markets • intern. competition &

efficiency• efficient market

mechanism• freer movement of

resources• freedom to choose

TRADE LIBERALIZATIONvs. PROTECTIONISM

(reasons for) (reasons for)

• specialization• absolute/comparative

advantage• access to markets • intern. competition &

efficiency• efficient market

mechanism• freer movement of

resources• freedom to choose

• protect jobs (votes)• protect domestic ind.• strategic reasons

– infant industries

• political pressure• protect culture (?)• revenue• prevent dumping

Which reason for imposing barriers to trade should apply?

Why? Explain the cartoon!

Collocations from paragraphs 3, 4 & 5 im________ tariffs & quotas / restrictionspro________ strategic / infant industriesab_________ sectorsl____ to structural unemploymentred________ a balance of payment deficitpr_________ against dumpingdes_______ or wea______ competitorsret________ against restrictionsa_________ economies of scales____ a limit to importspro______ revenue for the government

Collocations from paragraphs 3, 4 & 5 impose tariffs & quotas / restrictionsprotect strategic / infant industriesabandon a sectorlead to structural unemploymentreduce a balance of payment deficitprotect against dumpingdestroy or weaken competitorsretaliate against restrictionsachieve economies of scaleset a limit to importsprovide revenue for the government

TRADE BARRIERS

• Tariffs

• Import quotas

• Embargo

• Subsidies

• Non-tariff barriers:

Import substitution

Safety norms

Customs difficulties and delays

Name the trade barrier1. Taxes on imported goods. They raise the price to

customers and make them less attractive.

2. Limits on the quantity of a product that can be imported into a country e.g. 200,000 cars.

3. Laws and safety guidelines.

4. Making it difficult to arrange all certificates necessary to import into a country.

5. When a country produces and protects goods that cost more than those made abroad.

6. Money paid by a government to producers of certain goods to help them provide low-priced goods without loss to themselves.

7. A government order to stop trade with another country.

Tariffs

Quotas

Subsidy

Safety norms

Import substitution

Embargo

Custom difficulties and delays

Barriers to free trade and what to do with them:Complete the sentences with appropriate terms:

Customs ______ on seafaring vessels are very high.

Only breeders of endangered species qualify for government _________.

If the Govt. lifts import ________ for apples, nobody knows what quantities of apples will be imported.

The Government decided to impose a high _____ on the import of SUVs in order to disuade people from buying them.

Importers will face charges if they ________ quotas.

The government will _______ subsidies to electric car companies and their suppliers.

duties

subsidies

quotas

tariff

exceede

grant / provide

RB, p 46

Read paragraphs 6 & 7 to explain: ORGANISATIONS PROMOTING FREE TRADE &

THEIR FUNCTION

OPPOSITION TO FREE TRADE

Heading?

Organizations promoting free trade

Reasons for protectionism

Economic reasons for free trade

Problems of developing countries

• What is GATT?

• What is WTO?

• What does the final GATT agreement from 1997 include?

• Which form of protectionism is the only one allowed by the WTO?

• Why did it take 50 years to finalize the agreement?

Collocations from paragraphs 6 & 7

gr____ favourable conditions

opp_____ free trade

countera_____ a fall in prices

pra______ import substitution

Collocations from paragraphs 6 & 7

grant favourable conditions

oppose free trade

counteract a fall in prices

practice import substitution

Read paragraphs 8 & 9 to explain:

PROBLEMS & FEARS OF DEVELOPING COUNTRIES (IMF)

Heading?

Organizations promoting free trade

Reasons for protectionism

Economic reasons for free trade

Problems of developing countries

Read paragraphs 8 & 9 to explain:

PROBLEMS & FEARS OF DEVELOPING COUNTRIES (IMF)

1 need to repay huge d____ - IMF imposed obligation to export

2 s_______ of the East Asian “Tiger” economies

3 c_______ of the Soviet Union

4 potential ex________ from the t______ blocks (the EU, NAFTA)

Read paragraphs 8 & 9 to explain:

PROBLEMS & FEARS OF DEVELOPING COUNTRIES (IMF)

1 need to repay huge debts - IMF imposed obligation to export

2 success of the East Asian “Tiger” economies

3 collapse of the Soviet Union

4 potential exclusion from the trading blocks (the EU, NAFTA)

Collocations:

p_____ the interest r______ the principalr______ (renew) a loanr _________ (postpone) repaymentsi________ severe conditionst_______ blocksl_______the economyl_______trade barriers

HW: RB, p 47 Write the questions.

MK, p 133 Education and protection

Read the text and get ready to answers

Questions 1 & 2 + Discussion