Chapter 39 - International Trade and Globalisation

• Implications of globalisation on economy and society

  More trade

  Employment

  FDI

  Cultural issues

  Increased use of resources
• Implications of globalisation on consumers

  Lower prices

  Increased choice
• Implications of globalisation on businesses

  More competition

  More export opportunities

  Takeovers (taken over by larger business)
• Globalisation


  Process by which the world becomes interconnected through trade and sharing of cultures
• Enterprise Ireland


  The state agency that assists Irish businesses that want to sell their products or services to other countries
• Why do countries impose barriers

  National security (eg, stop spread of disease)

  Protect domestic industries

  Protect domestic employment

  Protect against cheap labour economies
• Tariff


  A tax on imported goods
• Embargo


  Ban on goods being imported from a certain country
• Subsidy


  government payment to encourage or protect a certain economic activity
• Quota

  A limit placed on the quantities of a product that can be imported from a certain country
• Barriers to trade

  Tariff

  Embargo

  Subsidy

  Quota
• Challenges of international trade on Irish businesses

  High costs (exporting, ships)

  Language barrier

  Exchange rates (price of non-euro products is more expensive)

  Competition from low-cost economies
• Benefits of international trade on Irish businesses

  Raw materials (imports)

  Spreads risk (not relying on local market alone)

  Increased sales
• Balance of Payments

  Total exports - total imports
• Balance of Trade

  Visible exports - visible imports
• Why does Ireland export goods and services>

  Creates employment

  Demand

  Earn foreign currencies

  Increased sales/profits
• Why does Ireland import materials?

  Climate

  Raw materials

  Skills

  Cost

  More consumer choice