Foreign Trade

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

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What is Home/Domestic Trade?

• Buying and selling of goods services in our own
  country.

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What is Foreign Trade?

• Importing buying goods services from other
  countries.
• Exporting selling goods services to other
  countries.

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Who are our main Trading Partners?
COUNTRY CURRENCY LANGUAGE
USA Dollar English
Britain Sterling English
Europe Euro others Various
Japan (importing) Japanese Yen Japanese
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What are imports?

• Goods and services that we buy from other
  countries.
• Money leaves Ireland.

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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.

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Visible Imports

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

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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

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What is Import Substitution?

• Buying Irish goods instead of foreign goods.
• Eg. buying Irish potatoes instead of Spanish
  potatoes.

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What are Exports?

• Irish goods and services that we sell to foreign
  countries.
• Money comes into the country.

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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.

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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.

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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.

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Problems connected with foreign trade.

• Language
• Currency exchange rates may change.
• Transport
• Insurance
• Safety standards are different in each country.

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What is the Balance of Trade? (TV)

• Visible Exports Visible Imports

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What is the Balance of Invisible Trade?

• Invisible Exports Invisible Imports

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What is the Balance of Payments?

• Total Exports Total Imports

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Balance of Trade/Payments can be.

• Surplus Exports greater than Imports
• Deficit Imports greater than Exports
• Balanced Exports Imports

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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.

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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.

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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.

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Exam Question 2006 P1 Q 3.

• Balance of Trade
• Visible Exports 540m
• Less Visible Imports 400m
• Surplus 140m

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Continued..

• Balance of Invisible Trade
• Invisible Exports 620m
• Less Invisible Imports 260m
• Surplus 360m

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Continued

• Balance of Payments
• Total Exports (540620) 1160
• Less Total Imports (400260) 660
• Surplus 500