Advantages of International Trade - PDF

ADVANTAGES OF INTERNATIONAL TRADE Ch. 1 – What is Trade? Success Criteria I will be successful when I can……………………. Explain how international business helps a country Variety, prices, and foreign markets ▪ Variety of products ▪ New markets, more jobs ▪ New processes and techn...

ADVANTAGES OF INTERNATIONAL TRADE Ch. 1 – What is Trade? Success Criteria I will be successful when I can……………………. Explain how international business helps a country Variety, prices, and foreign markets ▪ Variety of products ▪ New markets, more jobs ▪ New processes and technologies ▪ Cultural development ▪ Foreign investment Variety of products Without international trade, many products would not be available in your home country. – Think of the products you consume everyday. Are there Hong Kong/Chinese equivalents of all of them? Even if your country does produce certain goods you like, you may prefer foreign brands more. E.g. Canada can import banana from Costa Rica, and avocado from Mexico, which are not available to be produced in Canada. New markets, more jobs Being able to sell your goods internationally means you have a larger market. – Think of brands such as Ikea – If IKEA could only sell their goods in Sweden, they would only have a market of about 10 million people, compared to the billions of potential customers worldwide. If you can sell more of your goods, your business will expand, creating more jobs. New processes and technologies Foreign firms may offer new production processes or technologies to lower your costs or make an improved product for you. Cultural development Helps with exchange of cultural and ideas between countries, promote diversity Cultural customs can be adopted and adapted to local culture, give customers new ideas, looks, tastes, and sounds. E.g. Canadian musician like Justin Bieber, Drake, The Weekend collaborate with other artists, bring new sounds in global music industry E.g. Jollibee is the McDonald’s of the Philippines. Now they have more than 1000 restaurant in U.S., Singapore, Canada, Hong Kong, etc. Now Hong Kong people can enjoy the sweet spaghetti topped with hot dogs and cheddar cheese and their popular mango-peach pire Foreign investment Portfolio investment is the purchase of Canadian stocks and bonds by foreign firms. Foreign direct investment (FDI) involves foreign companies controlling some or all of a business’s operations.