It’s Time to Trade

1. It’s Time to Trade SS6E6 The student will analyze the benefits of and barriers to voluntary trade in Europe Compare and contrast different types of trade barriers such as tariffs, quotas, and embargoes Explain why international trade requires a system for exchanging currencies between nations

2. Class work Assignment • Take out a piece of notebook paper and draw a tree map with three branches. • Label your map – Trade Barriers • Label each branch – Tariff Quota Embargo

3. Tariffs • Taxes placed on imported goods • Make imported products cost more • Increases the demand for a lower-priced item produced domestically • Example: America may charge a tariff on imported cheese to make it more expensive. This would make Americans buy the cheaper, American-made cheese. In the end, by enforcing a tariff, America helps support its farmers and makes more money

4. Quotas • Put a legal limit on how much of a product can be imported • Can cause shortages • Causes prices to rise • Example: America may put a quota on how many BMW automobiles can be imported form Germany. This would make the price of BMW cars rise. It would also encourage Americans to buy cheaper, American-made cars. America benefits by selling more locally made cars and Germany benefits by selling more expensive BMWs.

5. Embargoes • When trade is not allowed between two countries • No goods can be sold or bought between two countries • Like putting the countries in “Time Out” • Example: America as a trade embargo with Cuba. America cannot buy or sell anything from Cuba and Cuba cannot buy or sell anything from America. It is illegal to buy Cuban cigars in America, for example, because they are an import from Cuba

6. How does the European Union encourage voluntary trade among its members? • The EU was established to set up free trade among countries of Europe • Accounts for 1/5 of the world’s trade • Products produced in Europe are traded in Europe without tariffs • This free trade leads to tremendous savings for European consumers & businesses

7. How does the European Union encourage voluntary trade among its members? • In order to protect its members, the EU sets quotas on trade with other nations • The EU will also embargo imports from foreign countries if that country doesn’t follow quota rules • Embargoes are also use for safety reasons • The EU may also embargo imports from countries for political reasons

8. Quick Quiz • Decide if the examples below represent a tariff, quota, or embargo • ___ 1. Only 3,000 pairs of American blue jeans can enter France • ___ 2. The U.S. charges an extra 10 cents per pound on bananas from Costa Rica

9. ___ 3. No Brazilian beef can be sold to Spain. • ___ 4. Only 10,000 barrel of oil can be delivered from Saudi Arabia to Italy this month. • ___ 5. The EU will not accept any products from an African nation because its government will not allow free speech or freedom of religion

10. You are going to create a product It can be anything… Name your product and draw a colorful picture of it

11. Questions about your Product Would you want to sell this product in other countries? Why? Why wouldn’t you want quotas when selling this product? Why wouldn’t you want tariffs when selling this product? Why wouldn’t you want an embargo when selling this product? Why might you want embargoes when selling this product?

12. Your Money = My Money • Working within your group, use CIA Factbook and complete the chart • As a group, complete the questions on the back of the chart. Be prepared to share your answers

13. Credits • Georgia Experience, 6th Grade Teacher’s Edition • Thinking Maps – Tree Map • GeorgiaStandards.org, 6th grade Framework Unit 3