Global Trade

GGS 12

L. Manuel

2011

What is trade?

• The act or process of buying, selling, or exchanging commodities, at either wholesale or retail, within a country or between countries.

Why Trade?

• They need/want something they do not have.

• Unequal distribution of resources– Caused by climate & landforms– Some countries have a surplus

of resources, while others are lacking resources.

Canada's Top 10 Export Markets by Country, 2008 Country                           

% Share of Total Exports

United States 77.7

United Kingdom 2.7

Japan 2.3

China 2.2

Mexico  1.2 

Germany 0.9 

Netherlands 0.8 

South Korea 0.8

Belgium 0.7 

France 0.7

Total of Top 10 90.0

Global Connections Read pages 290-295 and answer the following questions:

1. What is global trade?2. Why do countries trade with others?3. Explain the four factors affecting global trade and

give examples of each.4. What are some benefits of global trade?5. What are some environmental impacts of global

trade?6. Examine the case-study on pages 291-292.

– What factors helped Sri Lanka specialize in growing tea?

– Why does complimentarity exist between Sri Lanka and Great Britain?

Factors Affecting Trade• Specialization

– The matching of a region’s characteristics with the economic activities carried on there.

• Eg: Maritimes=fishing, Kenya=Coffee

• Complementarity– When specialization in the production of a

resource is good in one area, while there is a shortage of the same resource in another area

• Eg: Saudi Arabia has large oil reserves, but Japan lacks this resource and depends on other countries.

Factors Affecting Trade

• Politics– Some countries trade with one country & not

with the other because of an ideological bias• Eg: USA trade embargo with Cuba.

• Distance– The proximity & accessibility of resources to

markets (national or international). More likely to trade with countries that are neighbours.

• Eg. Canada’s largest trading partner is the USA.

Benefits of Global Trade

• Larger Market– A more diverse and expansive range of

markets are available

• Efficiency– Good efficiency leads to competitive prices,

which can make a desirable trading partner

• Trade Blocs– Easier trade, open boarders, & common $$

Free Trade vs. Fair Trade• Free Trade:

– Is trade between countries, free from governmental restrictions or duties. Seems to benefit MDCs but exploits developing countries.

– Eg. North America Free Trade Agreement (NAFTA)

• Fair Trade: – Is a trading partnership between

producers, traders/buyers and consumers which provides a more equitable and sustainable form of exchange.

– Focus is on exports from developing countries.

– Eg. Just Us! Coffee

Trade Justice: Why World Trade Rules Need to Change

Questions to Consider:

A. What are some of the features of Fair Trade production?

B. How is it different from conventional trade?

C. If you were a 17 year old Mexican, how would life on a Fair trade farm differ from life on a conventional coffee bean farm?

D. As a consumer, why would you buy Fair Trade products? Why would you not?

Benefits of Fair Trade

• Farmers & Workers

– Receive a stable price, higher than conventional price

– Benefit from a long-term relationship with fair trade buyers

– Receive additional money through the co-ops which they use for health, education and community projects

– Gain technical training and assistance

Tanzanian Fair Trade Coffee Farmer Bertha Fanueli Matowo

• Consumers

– Receive a high quality product– Choose an ethical alternative– Are part of the solution to global trade inequalities

Benefits of Fair Trade

• Environment– Small-scale farming systems minimize pollutants– Environmentally sustainable agricultural techniques– Eliminate use of dangerous pesticides

Benefits of Fair Trade

Fair Trade Items

Works Cited

"Canada Is A Trading Nation - Canada's Major Trading Partners." Invest in Ontario Home. (Ministry of Economic Development & Trade, 18 Sept. 2009). <http://www.investinontario.com/siteselector/coca_401.asp>. 15 Dec. 2009.

Morash, Emily. “Global Trade”. Global Geography 12 (GGS12). <http://emilymorash07.tripod.com/id1.html>.

15 Dec. 2009.

“Trade." Dictionary.com Unabridged. (Random House, Inc.) <Dictionary.comhttp://dictionary.reference.com/browse/trade>. 14 Dec. 2009.