Trade, Globalization

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Trade, Globalization International Organizations

• May 17, 2007

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Everyone is Interdependent
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Hersheys Kisses
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Why Do People Trade?

• Rate your level of satisfaction with your item
  (1-5, 5 being most satisfied)
• You may trade
• Rate your level of satisfaction with your item
  (1-5, 5 being most satisfied)
• Did your level of satisfaction increase? Why or
  Why not?
• Are you reasons any different from traders
  thousands of years ago?

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Benefits of World Trade

• Voluntary exchange among people, organizations,
  or countries gives them a broader range of
  choices in buying goods and services

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Trade in Africa 9th to 12th Centuries AD
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African Trade in the 12th Century
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• What incentive was there for people to become
  involved in this trade?
• Do you think the price of rock salt was the same
  in West Africa as it was in North Africa? Why or
  why not?
• If you were a trader, what things would you
  consider in choosing how to transport your goods?

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Why Didnt China Discover the New World?
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Triangular Trade
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The United States and the Global Economy
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Why do strangers cooperate?

• Why might whalers in the North Atlantic, owners
  of cotton plantations in the South, owners of
  textile mills in England, trappers in the Rocky
  Mountains, owners of retail stores in the North
  and in England, hat makers in Europe, and
  operators of stage lines, railways, and boats
  moving raw materials be willing to trade with
  each other when there was no law and no plan that
  said they must?

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Which of the Handy Dandy Guide principles are
best answer this question?

• People who lived in the 1800s did some strange
  things. Why would people who did not know each
  other, who spoke different languages, who fought
  wars with each other, who had different cultures,
  and who lived in different parts of the world be
  willing to cooperate with each other through
  trade?

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Handy Dandy Guide

• People Choose
• People's choices involve costs
• People respond to incentives in predictable ways
• People create economic systems that influence
  individual choices and incentives
• People gain when they trade voluntarily
• Peoples choices have consequences that lie in
  the future

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Explain corsets.
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Whale Out

• Why would anyone become a whaler?
• Why was whalebone used in corsets?
• Why did whalers from New England search for
  whales in the Pacific Ocean?
• Why did the whaling industry decline?

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Feeling Trapped

• Why would anyone become a fur trapper?
• Why did American fur trappers pose a threat to
  British trading companies?
• Why would silk from Asia replace beaver pelts as
  a material for mens hats?

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Somethings in the Way
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Why Restrict Trade?

• Steel
• Is an alloy
• Is made primarily from iron and carbon
• Was important to the development of the railroad
  system in the US
• Is used to produce many products
• Many people are employed producing products made
  from steel
• Many people buy products that are made from steel

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US places 30 Tariff on Steel

• Tariff- tax on imported goods
• Trade barriers- things that make trade less
  desirable or more difficult

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How does a steel tariff affect various groups of
people in the US and abroad?
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Count Your Toothpicks.

• How many gave up toothpicks?
• How many got additional toothpicks?
• Toothpicks given up COSTS
• Toothpicks received BENEFITS

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• What was the cost of the steel tariff to US
  consumers?
• What was the cost of the steel tariff to workers
  at US auto assembly plants?
• What was the cost of the tariff to workers at
  manufacturing companies such as Sony in Japan?
• What was the cost of the tariff to truck drivers
  and others who transport good made from steel?
• What was the cost of the tariff to people in the
  US and other countries who live in communities
  where there were lay-offs?
• If people in the US and other countries were hurt
  by the tariff, why did the US Congress impose the
  policy?
• Who in the US might favor such a policy?

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Interdependence

• Because of the steel tariffs