1
___________________________________
Slide 1
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 2
___________________________________
Trade Choices
You have $1,000 to spend and your alternatives are:
• Purchase 1 U.S.-made television and 1 U.S.-made bicycle.
or
• Purchase 1 Chinese-made television, 1 Korean-made bicycle
and 2 cases of French wine.
or
• Purchase $1,000 of stock in a Canadian company.
Which do you choose?
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 3
___________________________________
___________________________________
Voluntary Trade
Creates Wealth
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
2
Slide 4
Example 1
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 5
Example 1
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 6
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
3
Slide 7
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 8
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 9
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
4
Slide 10
Win - Win
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 11
Win – Win ?
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 12
Win – Win ??
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
5
Slide 13
___________________________________
Win – Win ???
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 14
___________________________________
Trade & Comparative Advantage – Example
Apples and Oranges
___________________________________
• Apple price $.70/lb
• Orange Price $.70/lb
• Washington Grower
• 20 acres yields
• Apples 50 bu/acre
• Oranges 1bu/acre
___________________________________
• Florida Grower
• 20 acres yields
• Apples 2bu/acre
• Oranges 40 bu/acre
___________________________________
___________________________________
___________________________________
___________________________________
Slide 15
Top 10 U.S. Trade Partners, Total Trade, Year to Date (May, 2014)
___________________________________
US$, bn, unrevised
Rank
Country
---
Total, All
Countries
Canada
China
Mexico
Japan
Germany
Korea, South
United Kingdom
France
Saudi Arabia
Brazil
1
2
3
4
5
6
7
8
9
10
Exports Imports
665.2
948.2
Total
Trade
1,613.4
% of
Total
Trade
100.0%
127.0
49.3
98.3
27.7
21.1
18.8
21.3
13.1
7.2
17.7
141.0
174.5
119.0
55.3
50.2
27.9
22.4
19.7
24.4
11.2
268.0
223.8
217.2
82.9
71.3
46.7
43.7
32.8
31.6
29.0
16.6%
13.9%
13.5%
5.1%
4.4%
2.9%
2.7%
2.0%
2.0%
1.8%
___________________________________
___________________________________
___________________________________
http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html
___________________________________
___________________________________
___________________________________
6
Slide 16
___________________________________
U.S. Trade, Imports & Exports, Year to Date (May, 2014)
US$, bn, unrevised
Rank
Country
--1
Total, Top 15
Countries
China
Country
% of
Total
Imports
726.5 76.6% Total, Top 15
Countries
174.5
18.4% Canada
2
Canada
141.0
3
Mexico
119.0
4
Japan
55.3
5
Germany
50.2
6
Korea, South
27.9
7
Saudi Arabia
24.4
8
U.K
22.4
9
France
Imports
10 India
477.5
% of
Total
Exports
71.8%
Exports
127.0
19.1%
14.9% Mexico
12.5% China
98.3
14.8%
49.3
7.4%
5.8% Japan
5.3% U.K.
27.7
4.2%
21.3
3.2%
2.9% Germany
2.6% Korea, South
21.1
3.2%
18.8
2.8%
2.4% Netherlands
2.1% Brazil
17.9
2.7%
19.7
17.7
2.7%
19.2
2.0% Hong Kong
16.8
2.5%
___________________________________
___________________________________
___________________________________
http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html
___________________________________
___________________________________
___________________________________
Slide 17
___________________________________
U.S. Trade Surplus & Deficit, Year to Date (May, 2014)
US$, bn, unrevised
Rank
Country
1 Hong Kong
2 Netherlands
3 United Arab
Emirates
4 Australia
5 Brazil
6 Singapore
7 Belgium
8 Panama
9 Argentina
10 Egypt
Surplus
14.5
8.8
7.6
6.7
6.5
6.1
5.3
4.2
2.7
2.6
Rank
1
2
3
4
5
6
7
8
9
10
Country
China
Germany
Japan
Mexico
Canada
Korea, South
Saudi Arabia
India
Ireland
Italy
http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html
Deficit
-28.8
-6.6
-5.1
-4.3
-2.8
-2.7
-2.7
-2.4
-2.1
-2.1
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 18
___________________________________
___________________________________
___________________________________
___________________________________
http://www.census.gov/foreign-trade/data/index.html
___________________________________
___________________________________
___________________________________
7
Slide 19
___________________________________
Balance of Payments
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 20
___________________________________
Example
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 21
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
8
Slide 22
The Data
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 23
The Data
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 24
The Balances
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
9
Slide 25
Trade Deficit
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
Slide 26
International Comparisons of Hourly Compensation Costs in Manufacturing
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________
___________________________________