Chapter 39: International Trade and Globalisation

International trade

Buying and selling goods/services between countries.

Example of international trade?

Ireland exports beef to France and imports cars from Germany.

Global business

A company operating in multiple countries.

Example of a global business?

Ryanair operates flights across Europe.

Globalisation

The increased connection of economies through trade, investment, and technology.

Example of globalisation?

Irish companies like Kerry Group sell food ingredients worldwide.

Exporting

Selling goods/services to another country.

Example of exporting? -USA

Irish dairy products like Kerrygold butter are sold in the USA.

Importing

Buying goods/services from another country.

Example of importing - Norway

Ireland imports oil from Norway.

Visible trade

Trade of physical goods.

Visible exports

Goods sold to other countries.

Example of visible exports?

Irish whiskey brands like Jameson are exported globally.

Visible imports

Goods bought from other countries.

Example of visible imports?

Ireland imports electronics like iPhones from China.

Invisible trade

Trade of services.

Invisible exports

Services sold to other countries.

Example of invisible exports?

Irish tech companies like Stripe provide payment services worldwide.

Invisible imports

Services bought from other countries.

Example of invisible imports?

Irish businesses use companies like Microsoft.

Trade barriers

Policies that restrict trade.

Tariff

A tax on imports to make them more expensive.

Example of a tariff?

The EU may impose tariffs on non-EU agricultural products to protect European farmers.

Quota

A limit on the number of imports allowed.

Example of a quota?

The EU could set a quota on non-EU steel imports to protect European manufacturers.

Embargo

A total ban on trade with a country.

Example of an embargo?

The EU imposed trade restrictions on Russia due to the Ukraine conflict.

Subsidy

Government financial support to help domestic businesses compete.

Example of a subsidy?

Irish farmers receive EU subsidies under the Common Agricultural Policy (CAP).

Deregulation

Reducing government rules to encourage business competition.

Example of deregulation?

Ireland deregulated the airline industry, leading to the rise of Ryanair.

Balance of trade

The difference between the value of visible exports and visible imports.

Example of balance of trade?

Ireland has a trade surplus because it exports more pharmaceuticals than it imports.

Balance of payments

The difference between total money coming into a country (from exports and foreign investment) and total money leaving (from imports and investment abroad).

Example of balance of payments?

Ireland has a strong balance of payments due to foreign companies like Apple investing in the country.

What is Enterprise Ireland?

A government agency that supports Irish businesses in exporting.

Example of Enterprise Ireland’s work?

Enterprise Ireland helps Irish start-ups expand internationally, like Gym+Coffee selling clothing abroad.

Free trade

Trade without restrictions like tariffs or quotas.

Example of free trade?

Ireland benefits from free trade within the EU, making it easy to sell goods to France and Germany.

Global marketing (4Ps)

Product, price, place promotion

Product

What is being sold.

Example of product marketing?

Guinness beer is marketed worldwide.

Price

How much it costs.

Example of price strategy?

Ryanair offers low-cost flights to compete globally.

Place

Where it is sold.

Example of place strategy?

Primark (Penneys in Ireland) has stores in multiple countries.

Promotion

How it is advertised.

Example of promotion strategy?

Tourism - Ireland markets Ireland as a travel destination internationally.

Economies of scale

Cost savings when businesses produce more, lowering the cost per unit.

Example of economies of scale?

Irish dairy farms benefit from economies of scale by producing large amounts of milk at a lower cost.