International Trade Economics Essay

2058 words - 9 pages

International Trade Economics
Assignment 1

Question 1

a. Trade in services occur when there is no physical movement which is opposite to trade in goods. Based on case study of South African citizen visiting NZ, the modes of Trade in Services that would result from the transactions and activities of this individual are:

mode1. Cross-border when South African citizen purchase a ticket online (IT services),

mode2. Consumption abroad which has result after person has moved abroad as tourists to consume the respective services


mode4. Movement of natural persons that has accrued when person have had attended business meeting in NZ. In other words this mode can be described ...view middle of the document...

America has more trade with its neighbour Canada than with the whole Europe and the only reason for this is close locations. This partly reflects with increase of costs of transporting. In addition, countries have Canada –United States Free Trade Agreement which allows countries to ship goods and services without tariffs or other barrier to international trade. It also has a positive effect on tangible factors as economist believes that trade is to be more intense when countries has personal contact and in case of Canada and America it is very easy to reach due to visa free excess and language. For instance, U.S. imports of agricultural products from Canada totalled $16.2 billion in 2010 and it is largest supplier agricultural imports. Leading categories: snack foods (including chocolate) ($2.7 billion), red meats, fresh/chilled/frozen ($1.8 billion), live animals ($1.5 billion), and other vegetable oils ($1.1 billion) (USTR, 2012). All estimated gravity models show a strong negative effect of distance on international trade; 1 per cent increase in distance cause a fall of 0.7 to 1 per cent in trade and why this is, it is still on-going topic of research.

No body has now doubted about the role of cultural factor in international trade. Example that support this statement could drawn from these two countries: New Zealand and United Kingdom . Distance is significant, however it does not influence trade much. The relationship between New Zealand and Britain remains strong and close. This closeness arises from our historical connection with Britain, common traditions and values, and family ties: New Zealand has enjoyed several waves of immigration from Britain, the most recent during the seventies. Beyond these personal links, Britain is still a significant trading partner and often throws its weight behind New Zealand in the EU where trade access issues are concerned.

NZ Exports (FOB): NZ$1.56 billion
Main exports: sheepmeat (45%), wine (19%), dairy products 5%, electrical machinery (3%), wool products (3%).
NZ Imports (CIF): NZ$ 958 million
Main imports: vehicles (13%), books and newspapers (9%), pharmaceutical products (7.5%), machinery (15%), electrical machinery (8%). (NZMAFT, 2012)

Question 2


The production possibility frontier (PPF) of an economy shows the maximum amount of goods that can be produced for a fixed amount of resources in an economy (Krugman et al.,2012). Qv represents the quantity of cars produced and Qc represents the quantity of cheese produced.

The economy’s total labour supply n in NZ is 3000 (500 in UK) and that it takes 25 hours (25 in UK too) of labour to produce a kilogram of cheese and 2000 hours (50 in UK) to produce a car. Therefore the maximum number of cheese that can be produce in NZ is 120 kg/20 in UK and 1.5 cars in NZ /10 in UK.

Shape of the PPF in this case is downward sloping, based on these assumptions: only two countries, two goods, one input (labour),...

Other Essays Like International Trade Economics

Applying International Trade Concepts Paper

1429 words - 6 pages for international trade is comparative advantage, and by using comparative advantage, a country can improve the overall welfare of its economy. Competitive advantage can also be applied to situations other than business, which can make things more efficient. References Colander, D. C. (2008). Economics (7th ed.).  Burr Ridge, IL: Irwin/McGraw-Hill. InfoUSA. (2003). The pros and cons of pursuing free-trade agreements. Retrieved from http

Challenges for Canadian International Trade Essay

2635 words - 11 pages . (June 7, 2007). The canadian chamber of commerce 2007 international trade day. CHALLENGES FOR CANADIAN TRADE POLICY: THE WAY FORWARD, Retrieved from Steven Dunaway, Adjunct Senior Fellow for International Economics. (February18, 2010). China's exchange rate policy: The heat is on. Retrieved from THE WORLD FACTBOOK. (February 22, 2011). Retrieved from

How Rich Countries Got Rich and Why Poor Countries Stay Poor?

1042 words - 5 pages mainstream economics(neo-liberalism) and international free trade can narrow the wage and rich-poor gap between rich countries and poor countries. Reinert criticizes them because there don't exist any exmaples of success in narrowing the gap historically and argues that "harmonious economy" is not a result of internationl free trade and laissez-faire but conscious policies since in contrast to rich countries which are already developed through

Finance Trade Speech

1267 words - 6 pages . Even though there has been a slight decline since the early 2000’s, the United States is and will always be an international leader in the world of trade and economics. References: ISBN: 9780077247171 Author: David C. Colandercopyright © 2010 McGraw-Hill

Asia's Export Performance

2719 words - 11 pages /HTMLSTART Alves, P. & Kaplan. D. 2004. “SA’s declining export shares: The developing country challenge”. Trade and Industry Monitor. Retrieved March 22, 2009, from Appleyard, R.D. & Field, A. 1995. International Economics: Trade theory and Policy (2nd edition). Athukorala, P. 2007. The Rise of China and East Asian

ECO 372 Tutorials / eco372dotcom

1039 words - 5 pages deliver a speech about the current state of the U.S. Macro economy to a number of amateur reporters who are unfamiliar with economics. Prepare a 750- to 1,050-word speech in simple terms and concepts that focus on international trade and foreign exchange rates. Integrate a summary of your answers tothe following questions and cite external research to further justify your facts: • What happens when there is a surplus of imports brought

Global Business Issues

1795 words - 8 pages not depend on world Market. It’s not mean that ASEAN is Isolated from another countries and other Union but it’s mean that ASEAN start to bring themselves an strong economics to their region and start to develop with peace prosperity. ASEAN Free Trade Area will start in 2015 and will expand to all nations in ASEAN community. With one condition that brings to these nations are allowed the small nation-state to specify in one product to export in

Comparative Advantage

1179 words - 5 pages International Economics ECON22185 Assessment title: Analyse how, according to the Heckscher-Ohlin model of international trade, factor endowments explain a country’s comparative advantage and determine which types of goods a country will produce, export and import. According to J.Sloman (2010) comparative advantage is defined as ‘a country has a comparative advantage over another in the

Comparative Advantage

2632 words - 11 pages limitations. Retrieved from China Global Trade. (n.d.). Retrieved from Golub, S., & Hsieh, C. (2000). Classical ricardian theory of comparative advantage revisited. Review of International Economics, 8(2), 221-234. Hall, P. (2012, Feb 13). Latin american success: A case for

Regional Economic Integration and the Impact of the Single European Market

2075 words - 9 pages ;>. "Single European Act -." Wikipedia, the free encyclopedia. 02 Mar. 2009 <>. Suranovic, Steven M. "Trade: Chapter 110-2A: Trade Diversion and Trade Creation." The International Economics Study Center | Home. 28 Feb. 2009 <>. "Trade Creation vs. Trade Diversion." Dickinson

Week4-5 Study Material

2004 words - 9 pages BEA website if you would like to find the value of the GDP Deflator for recent periods).  Know how to calculate growth or the rate of change in indexes.  Week 5: International Issues Introduction International Trade Foreign Exchange Rate Introduction | | We will begin the discussion of international economics with a brief outline of world trade patterns, and introduce a number of important trade concepts: the meaning of comparative

Related Papers

Economics International Trade Essay

1178 words - 5 pages are situations in which trade restrictions are preferred. Protecting a developing domestic industry from competition from abroad or preventing dumping are two such situations. In general bilateral or multilateral trade agreements that reduce trade barriers among countries generally leads to increased benefits for all countries concerned. Bodies like the World Trade Organization (WTO) that have been set up to increase the growth of international trade will also play an important role in the continuing evolution of international trade.ReferencesColander, D. C. (2004). Economics, Burr Ridge, IL: Irwin/McGraw-Hill.

Sdeafdfaf Essay

660 words - 3 pages ., Pacific Dynamism and the International Economic System, Washington, D.C.: Institute of International Economics, 1993, pp.299-322. K. Sato, “The International Use of the Japanese Yen: The Case of Japan's Trade with East Asia”, The World Economy, 22 (4), 1999, pp. 547–584. Kenen, Peter B. “International Money and Macroeconomics,” in K.A. Eliot and J. Wiliamson eds., World Economics Problems , Institute for International Economics, Washington, 1988. Li

Iimpact Of International Trade Fair Participation On Export – An Empirical Study Of China Based On Treatment Effect Model

5490 words - 22 pages Impact of International Trade Fair Participation on Export – An Empirical Study of China Based on Treatment Effect Model Silu Shrestha, Zhuo Li* Economics and Management School, Wuhan University, Wuhan, Hubei, China This paper examines the impact of international trade fair participation on export of China, explained by participation in overseas international trade fairs organized by China Council for Promotion of International

International Trade Speech

1362 words - 6 pages International Trade Speech Jeffrey D. Randolph, Paul Etuk-Udoh, John Benson, Nathan Delguidice ECO 372 May 20, 2015 Elena Zee International Trade Speech Ladies and gentlemen of the press, welcome to the House of Representatives. Today I will discuss some of the more interesting aspects of the United States economy. Economics, of course, is a combination of theories, principles, and models that deal with the distribution of