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Foreign Trade

Foreign Trade. For up-to-date statistics visit slss.ie Business & Enterprise Economics Susan Hayes the positive Economist updates. What is Home/Domestic Trade?. Buying and selling of goods & services in our own country. What is Foreign Trade?.

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Foreign Trade

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  1. Foreign Trade

  2. For up-to-date statistics visit • slss.ie • Business & Enterprise • Economics • Susan Hayes the positive Economist updates

  3. What is Home/Domestic Trade? • Buying and selling of goods & services in our own country.

  4. What is Foreign Trade? • Importing: buying goods & services from other countries. • Exporting: selling goods & services to other countries.

  5. Who are our main Trading Partners?

  6. What are imports? • Goods and services that we buy from other countries. • Money leaves Ireland.

  7. Why do we import? • To obtain goods that are not available in Ireland. Eg. oil, tea, coffee …………. • To avail of services not in Ireland. Eg. pop groups, foreign holidays……… • To have varitey and choice of goods & services.

  8. Visible Imports • Goods which are bought from other countries. • Money leaves the country • Eg. citrus fruit, wine, cars……..

  9. Invisible Imports • Services that are bought from other countries. • Money leaves the country. • Eg. • Irish person on holidy in USA • BEP in concert in Dublin • French horse winning Irish Grand National

  10. What is Import Substitution? • Buying Irish goods instead of foreign goods. • Eg. buying Irish potatoes instead of Spanish potatoes.

  11. What are Exports? • Irish goods and services that we sell to foreign countries. • Money comes into the country.

  12. Why do we export? • To obtain foreign currency needed to buy our imports. • Ireland is a small country so we need a wider market such as EU, USA etc. • Selling more means more jobs are created.

  13. Visible Exports • Irish goods that are sold to foreign countries. • Money comes into the country. • Eg. Irish beef sold abroad. • Tullamore Dew sold to UK • Waterford Crystal sold to US.

  14. Invisible Exports • Irish services that are sold to foreign countries. • Money comes into the country. • Eg. • Westlife playing in Wembly. • US citizen on holidy on Ireland. • Irish horse winning the English Grand National.

  15. Problems connected with foreign trade. • Language • Currency – exchange rates may change. • Transport • Insurance • Safety standards are different in each country.

  16. What is the Balance of Trade? (TV) • Visible Exports – Visible Imports

  17. What is the Balance of Invisible Trade? • Invisible Exports – Invisible Imports

  18. What is the Balance of Payments? • Total Exports – Total Imports

  19. Balance of Trade/Payments can be……. • Surplus: Exports greater than Imports • Deficit: Imports greater than Exports • Balanced: Exports = Imports

  20. Benefits of a Balance of Payments Surplus • More money coming into the country. • This money can be used to pay off some of our debt or reduce tax. • More money and jobs and a better standard of living for Irish people.

  21. What problems will a Balance of Payments deficit cause? • Too much money leaving the country. • Government will have to raise taxes and/or borrow. • Irish people will lose their jobs.

  22. How can a Balance of Payments Deficit be reduced? • Import substiution: Buy Irish! • Government Agencies such as An Bord Trachtala, Failte Ireland and An Bord Bia can promote/market Irish exports.

  23. Exam Question 2006 P1 Q 3. • Balance of Trade • Visible Exports €540m • Less Visible Imports €400m • Surplus €140m

  24. Continued.. • Balance of Invisible Trade • Invisible Exports €620m • Less Invisible Imports €260m • Surplus €360m

  25. Continued… • Balance of Payments • Total Exports (540+620) €1160 • Less Total Imports (400+260) € 660 • Surplus €500

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