Specialisation+and+Trade

=What are the advantages and disadvantages of specialization and International trade? = = = = = = = = = = = = =
 * Specialisation and International Trade **
 * **Greater efficiency** (concentrate on areas you are naturally good at and also practice makes perfect). An example is China specializes in mass produced low cost goods. Why? Because of the abundance of low skilled low cost labour. US specializes in other areas such as design as it has innovative skilled (but expensive workers)
 * **But over specialization is risky.** What happens if people no longer want the goods and services that you produce. Eg demand for rubber has fallen due to synthetic substitutes. Many countries have now high unemployment and low GDP because demand for their products have fallen. (structural unemployment)
 * **Some countries specialize because they have resources that other countries do not**. Eg Saudi Arabia has lots of oil. Countries like Japan have none, but Japan is great at making cars and electronics. So they specialize and trade with each other.
 * **However relying on another country for vital resources makes a country dependent on another country. This is strategically not good for that country.** Eg US is dependent on Saudi Arabia for oil imports. If the rulers of SA were deposed the oil supply to the US may run out!
 * =Consumers benefit from specialization as they get greater choice and often cheaper products =
 * **However with International Trade some parts of the economy may not be able to compete with cheaper/better imports.** eg US firms may see demand for their products fall due to cheaper imports from China. This may lead to structural unemployment.


 * **A disadvantage of international trade is the carbon footprint that transportation creates **
 * =International trade means that firms can have access to the whole world market. This allows them to grow bigger. They can then benefit from economies of scale. =

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 * Student Task: Find an article which looks at international trade and highlight the advantages and disadvantages expressed in the article: You'll be required to give a short (5 minutes) talk to the rest of the group, on this. **


 * Globalisation and the growth of International Trade: Try and find a basic definition for Globalisation. It must be a simple sentence that you can easily remember. Make a note of it. Find some data to show the growth of international trade and globalisation. **