Foreign Trade Chapter 17 Flashcards
What is importing
The purchase of goods and services from other countries for sale in Ireland (money leaves Ireland).
What is Exporting
When Irish goods and services are sold to other countries. (Money comes into Ireland).
What is Visible Imports
The purchase of physical (visible) goods from another country e.g Ireland buying tea from Sri Lanka.
What is Invisible Imports
The purchase of services from another country e.g Irish person holidaying in France.
What is Visible Exports
The sale of physical (visible) goods to another country e.g Ireland selling beef to Britain.
What is Invisible Exports
The sale of services to another country e.g The Irish band West Life performing in Germany.
What is Importing Substitution
The purchase of Irish made goods instead of foreign imports e.g buying Tayto crisps instead of walkers crisps.
What are the reasons for importing
1) Ireland does not have certain natural resources that are necessary for everyday living e.g such as oil, timber and coal.
2) the Irish climate doesn’t suit the production of items such as oranges, tea cotton or rice. We therefore need to buy these goods from other countries.
3) Irish people like a range of goods e.g iPod, iPad, many which are not made in Ireland, so they must be imported.
What are the reasons for Exporting
1) Some countries are not able to produce large quantities of food products because their land or climate is unsuitable e.g potatoes.
2) Some goods can only be manufactured in Ireland because the skills and traditions needed are only available in Ireland e.g Aran Knitwear
3) As Ireland is a very small island, the Irish market is too small, and such Irish firms need to export their goods/services to make profit.
What are the difficulties associated with foreign trade
1) Transport
2) Foreign Currency
3) Damage
4) Language
5) Documents
Explain Foreign Currency
~ Increased costs due to commission charges and exchange rates.
Explain Language
~ They will have to deal with a different language when selling goods to some countries and may have to redesign packaging.
What are the Main Trading Partners
🔶 Ireland imports and exports most goods and services from Britain and Northern Ireland.
🔶 Principal sources of imports
- UK, USA, Germany, Japan, France
🔶 Principal sources of exports
- UK, USA, Germany, France.
What is the State Involvement in Exporting
The state organisation Enterprise Ireland assists Irish exports in the following ways
~ Provides information on foreign markets, shipping and transport.
~ Organises trade fairs and exhibitions abroad.
~ Arranges meetings with foreign buyers.
What are the Other organisations which promote Irish exports
- Bord Bia
- Tourism Ireland
- IDA ( Industrial Development Authority )
What is the balance of trade
~ The balance of trade is the difference between a country’s visible imports and visible exports.
~ Balance of trade surplus
- total exports > total imports
~ Balance of trade deficit
- total exports
What is the Balance of Payments
🔹 The Balance of Payments (on current account ) can be determined by comparing a country’s visible and invisible imports (Total Imports) to the visible and invisible exports (Total Exports )
🔹 Balance of payments surplus
- Total Exports > Total Imports
🔹 Balance of Payments deficit
- Total Exports
What is the benefits of EU Membership to Ireland
🔶 Irish firms can sell their products/ services in a huge market and this has increased their sales and profits.
🔶 Irish people can travel or work in any EU member state (freedom of movement within the EU)
What is restricted trade
As a member of the EU, Ireland engages in free trade with other EU states. However, Ireland and the EU can restrict trade with other countries in several ways, including:
- Customs Duties
- Taxes on imports that make them more expensive and less competitive
- Quotas
- A limit on the quantity of goods that are allowed to be Imported
- Embargo
- A total ban on the import of certain goods from a certain country
- Subsidies (Grants)
- Given to exporters to assist them in selling their products more cheaply.
What is the currency of United States of America
American dollar
What is the currency of Australia
Australian dollar
What is the currency of Japan
Japanese Yen
What is the currency of South Africa
South African Rand
What is the currency of Russia
Russian Ruble/Rouble
What is the currency of Lithuania
Lisa’s
What is the currency of United Kingdom
Pound Sterling
What is the currency of Denmark
Krone
What is the currency of Sweden
Krona
What is the currency of Czech Republic
Czech Crown
What is the currency of Hungary
Florint
What is the currency of Poland
Zloty
What is the currency of Romania
Leu
What is the currency of Bulgaria
Lev
What is the currency of Croatia
Croatian Kuna
What is Foreign trade
Foreign trade occurs when Ireland buys goods and services from other countries or sells good and services to other countries.
