International Trade Flashcards
international trade
the exchange of goods and services between countries
importing and exporting
irelands main imports
machinery cars chemicals foods oil
irelands main exports
pharmaceutical products food and drink optical and photo apparatus electronics perfumes, cosmetics, toiletries
reasons for imports
access to natural resources we lack
doesnt have climate to grow certain products
may not have the skills to make certain products eg cars
imports give more choice + standard of living
reasons for exports
irish market is small
achieve economies of scale
diversify and spread risk
balance of trade
refers to the difference between the value of the visible exports, physical goods produced by businesses based in Ireland, and sold to foreign customers abroad, and the value of visible imports, physical goods that are purchased by irish customers from businesses based in foreign locations
visible exports - visible imports
how to overcome balance of trade deficit
increase exports
reduce imports
use more irish raw materials
balance of payments
measures the difference between total exports and total imports
difference between the total amount of money that comes into a country as a direct result of exporting and the total amount of money leaving a country as a result of importing
total exports - total imports
importance of international trade to Ireland
business
larger market
lower costs - economies of scale
growth of TNCs
raw materials
importance of international trade to Ireland
consumer
wider variety of goods
better quality goods - better skilled workers
lower prices - more competition
infrastructure - requires good transport and communication links
importance of international trade to Ireland
economy
foreign exchange
balance of payments - surplus
higher employment
international recognition - better relationships
free trade
enables countries to buy and sell each others goods and services without barriers to trade such as tariffs, quotas, embargoes
trading bloc
group of countries that organise a free trade area, common market or customs union between themselves in order to reduce trade barriers
agree on a common set of tariffs on imports from countries outside bloc
eg EU
barriers to trade (protectionism)
tariff
quota
embargo
subsidy
tariff
tax placed on imported goods
makes imported item more expensive and less attractive
quota
limit on number of products that may be imported
embargo
complete ban on all imports from or exports to a country
subsidy
gov gives financial support to a domestic industry or indigenous business so they can sell their products more cheaply around the world
payment to producer to reduce the cost of production, which boosts employment and exports
WTO
world trade organisation
body consisting of over 150 countries, including ireland
holds negotiations between countries and reach agreements to remove barriers to international trade
deregulation
reduction or elimination of gov power in a particular industry
involves removing legal barriers to entering an industry
usually creates more competition within the industry
increase in competition should to an increase in efficiency and lower prices
challenges for irish businesses in international trade
high costs languages location cultural differences exchange rates
impacts of ICT on international trade
high speed broadband - quick communication
more data analytics - better decision making
e commerce - higher sales
digital marketing
video conferencing
how changing nature of the international economy affects irish exporters
changes in technology
new emerging markets
growth in globalisation
new EU countries = more competition
government help for irish exporters
enterprise ireland
department of business, enterprise, innovation
diplomatic services - promote ireland abroad and lobbying foreign govs and companies to trade with irish businesses
