Global Connections
Global Connections
Teaching Resources
Global Connections­­—Page 1
© Commonwealth of Australia 2008
This publication is copyright with all rights reserved. Teachers may reproduce the material
contained in this publication for class use provided such material is not for resale or any form
of commercial gain. Apart from photocopying by academic staff, no part of this book may be
reproduced in any form or by any means without the written permission of Austrade, except as
permitted under the Australian Copyright Act 1968.
Published by Austrade Education Programs
Austrade
GPO Box 2386
Canberra ACT 2601
Australia
Fax (02) 6201 7304
Email: [email protected]
Website: www.austrade.gov.au/studentcentre/
Book
Writer:
Contributors:
Editors:
Illustrators:
Designer:
Mary Murphy
Leigh Derigo, Kate Conroy, Kelly Wilson
Leigh Derigo, Lauren Black, Jackson Rowe
Allan Geddes and Ed Radclyffe
Bytes ‘n Colours
Animated cartoon
Animator:
Script:
Audio:
Editors:
Allan Geddes
Patricia O’Connell
Patricia O’Connell, Lauren Black
Leigh Derigo, Lauren Black, Jackson Rowe, Kelly Wilson
Particular thanks to Saul Eslake, Chief Economist, ANZ Bank for his help in sourcing historical
data and Sue Begley, Statistical Unit, Department of Foreign Affairs and Trade for supplying
current data.
Book contents
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Chapter 1 Globalisation Means. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Community Connections. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Exercise 1.1 Australia’s overseas links. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Exercise 1.2 Community groups – local and global. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Part A Global Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Story starter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exercise 1.3 Story starter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exports and imports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Exercise 1.4 Where goods are made. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Exercise 1.5 Australian exports and imports – an introduction . . . . . . . . . . . . . . . . . 5
Exercise 1.6 International trade game – The Circle Makers . . . . . . . . . . . . . . . . . . . . . 5
Exercise 1.7 The Circle Makers – extension. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Exercise 1.8 Specialisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Part B Global Communications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exercise 1.9 Communication tools in my generation. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Exercise 1.10 Communication technology users . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exercise 1.11 Communications – interpretation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Exercise 1.12 Communication systems – artistic interpretation. . . . . . . . . . . . . . . . . 10
Exercise 1.13 Global media networks. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Part C Global Migration and Travel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exercise 1.14 People on the move . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Exercise 1.15 Reasons for Australian short-term overseas trips in 2006. . . . . . . . . 13
Exercise 1.16 Destinations for Australian short-term travellers in 2006. . . . . . . . . 13
Exercise 1.17 Lower travel costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exchange rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Exercise 1.18 Exchange rates. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exercise 1.19 Currencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Exercise 1.20 Globalise me. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Exercise 1.21 Global citizen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Part D Culture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exercise 1.22 Cultural exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Exercise 1.23 Global cultural products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exercise 1.24 Global brands. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Exercise 1.25 Globalisation definition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Chapter 2 Globalisation and Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Part A Australia’s Patterns of Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
A brief history of Australia’s trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Exercise 2.1 Australia’s export markets over time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Part B Australian Industry and businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Exercise 2.2 International trade at your house. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Exercise 2.3 Trade and income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Classifying Australian products. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Export businesses in Australia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exercise 2.4 Export businesses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Exercise 2.5 Export business research (industry study). . . . . . . . . . . . . . . . . . . . . . . . 27
Global Connections­­—Page i
Part C Goods and Services Trade. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Exercise 2.6 Australian goods and services exports. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Exercise 2.7 Australian goods and services imports. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Exercise 2.8 Exports by sector. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Exercise 2.9 Export celebrity heads. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Chapter 3 Globalisation Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Part A Trade in History. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Exercise 3.1 Trade in history activity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Exercise 3.2 Role play. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Part B Globalisation Drivers Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Exercise 3.3 Demand drives globalisation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Exercise 3.4 Exporting made easier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Part C Trade Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Trade barriers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Exercise 3.5 Trade protection in history. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Exercise 3.6 Trade agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Exercise 3.7 Subsidies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Part D Globalisation and Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Exercise 3.8 Education levels. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Exercise 3.9 Globalisation drivers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Exercise 3.10 Global trade game. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Chapter 4 Global Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Part A Country Development. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Exercise 4.1 Least developed countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Trade reduces poverty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Exercise 4.2 Reducing poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Part B Business Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Sustainable business practices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Exercise 4.3 Case study – code of conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Exercise 4.4 Export opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Appendix 1 World Map. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Appendix 2 Photocopy Master – Circle Maker Money . . . . . . . . . . . . . . . . . . . . 48
Appendix 3 Glossary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Appendix 4 Suggested Answers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Global Connections—Page ii
Introduction
The Australian Government Exporting for the Future program aims to raise awareness
among young Australians of the importance of exports to Australia.
Global Connections, developed by Austrade for years 5 to 8, has been written specifically
to meet the learning outcomes required by HSIE or SOSE curricula in all Australian
states and territories. This resource guides student investigation of four areas of
globalisation: the meaning of globalisation, Australian trade, globalisation drivers and
global responsibilities.
The main features of Global Connections are
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stimulus and exercises relate to the accompanying animation, Globalisation
the language level is accessible to students in years 5 to 8
complex concepts have been explained in simple, straightforward terms
Internet research is actively encouraged
important terms are defined in the glossary
structured exercises cater for a wide range of learning styles and abilities
many of the activities have the potential for deeper discussion and
investigation
suggested answers to the exercise are provided in Appendix 4.
Key knowledge outcomes
On completion of Global Connections, students will know about the
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nature and importance of trade to the individual, the economy and society
pattern of Australia’s trade; its composition and direction
drivers of global trade including technology and trade agreements
meaning of globalisation
impact of global business.
Key skills outcomes
On completion of Global Connections, students should be able to
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research and assess commercial information using a variety of sources
interpret trade data
work independently and collaboratively to meet individual and collective
goals
plan and conduct an investigation into trade or business related topics
communicate ideas using relevant language and concepts in appropriate
forms
identify key business and economic issues such as globalisation, and
global trade.
For other useful Austrade resources visit www.austrade.gov.au/studentcentre
Global Connections­­—Page iii
Globalisation Animated Cartoon
In the accompanying 15 minute animated cartoon, Globalisation, a year 6 student, Jack,
explores the meaning of globalisation for an assignment.
Jack and his robot guide fall through a portal into a parallel world for their journey
of discovery. They visit scenes that clarify different aspects of globalisation, including,
trade, communication, migration and culture. They also explore
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imports and exports
Australia’s trading history
global business practices
currency exchange
globalisation drivers
trade agreements
opportunities for entrepreneurs
trade’s influence on living standards in regional Australia and around the
world.
This cartoon provides an imaginative introduction to this book of stimulus and
exercises, to guide students’ study of globalisation, international trade and global
connections topics.
Global Connections—Page iv
Chapter 1—Globalisation Means…………
Chapter 1—Globalisation Means…………
Global trade
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Imports and exports
Trade with many countries
Trade agreements help exporters
More demand for goods and
services as living standards
improve
Lower business costs
trade
In the animated cartoon, Globalisation, Jack learns that globalisation involves
bringing together the economies and people of different countries through trade,
communication, migration and shared culture. Through this book you can further
investigate these topics and other parts of globalisation that influence our lives and
the lives of people overseas.
Global migration
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People moving to other countries
People working overseas
International tourism
Cheaper flights and transport
culture
migration
Global culture
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Global communication
communication
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Products from many
countries
Cultural exchange and
understanding
Cultural exports
Global advertising
Global organisations
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Cheaper, faster communication
Internet access
Global media networks
New technologies
Increased awareness of
international issues
Community connections
In the cartoon Jack’s teacher asked the class to find out what globalisation means to
them and the world. She said that global means something that involves the whole
world.
As you study globalisation, think about global influences on you, your family, your local
community and the global community.
Global Connections­­—Page 1
Chapter 1—Globalisation Means…………
Many different people make up your local community and have connections to you
and your family. A sports coach, for example, trains your team, a teacher educates you,
a local politician may want to build a new skate park and a policeman helps to protect
your community.
Australia is also a part of a wider community – the world. Australia helps many
countries and they help us. We also co-operate with each other, for example, many
countries agree to follow common trade rules. These rules mean that people in other
countries buy Australian products and services more easily and Australians can buy
products and services from overseas more easily. In addition, many Australian families
originally came from another country, so Australia has connections to other cultures.
We enjoy overseas culture so we watch films made overseas and international sports
such as soccer.
Exercise 1.1
Australia’s overseas links
Exercises
List the links Australia has with the following countries. New Zealand has been started
for you.
Country
Connection to Australia
New Zealand
Sport, tourism, ANZAC tradition and the Closer
Economic Agreement (CER)
Indonesia
USA
U.K.
China
Exercise 1.2
Community groups – local and global
In your local area there may be community organisations such as environmental
groups, a chamber of commerce, charities, cultural groups, sports clubs, neighbourhood
associations, trade unions and political groups.
1.
2.
Name five local community organisations/groups and explain what they do
for your community. Look in your local newspapers for ideas.
The following groups are international organisations. Use your library or
the Internet to investigate these and explain what they do for the global
community.
Group
United Nations (UN)
What the group does for the global community
International Red Cross
World Trade Organization (WTO)
Medecin Sans Frontieres
The World Bank
3.
Complete this paragraph:
Australia has many links with the international community. These links are important
to Australia because…
Global Connections—Page 2
Chapter 1—Globalisation Means…………
Part A
Global Trade
Story starter
Jack grabbed the shopping list as it
was his turn to help with dinner and
he needed some ingredients. As he
pushed the shopping trolley through
the supermarket, he decided to read
the labels to find out which countries
produced the many products on the
shelves.
He discovered that some of the tinned tomatoes came from Italy; soy sauce from
Singapore; bamboo shoots from China; pink salmon from the USA; Hokkien noodles
from Taiwan; asparagus from New Zealand; corn spears from Thailand; and chocolate
from Belgium.
Jack thought about shoppers in other countries buying Australian products. He
remembered seeing on the news something about the importance of global trade. He
then pictured the huge number of goods and services flowing around the world – a
global marketplace.
As he ate dinner that night, Jack wondered what life would be like if there was no
global trade. For a start he could not enjoy a meal made with products from all over
the world. He realised that trade is an important ‘ingredient’ in any country’s economy
and directly influences the way people live. He wondered if it was hard for a business
to sell its products and services overseas.
Exercise 1.3
1.
2.
3.
Story starter
What is the meaning of the phrase ‘a global marketplace’?
On a map of the world locate and label the countries mentioned in the story.
Predict what your life would be like if there was no global trade. Share your
answers with the rest of the class.
Exports and imports
Goods and services sold to foreign
consumers are exports. Goods and
services brought into Australia
from overseas are imports. Trade is
important to Australia – in 2007
we earned A$218 billion from goods
and services exports. Some of this
growth has come from selling more
commodities, such as coal and some
from new exporters selling their
products overseas. Austrade is the
Australian
Government
agency
that helps our businesses become
successful exporters.
Global Connections­­—Page 3
Chapter 1—Globalisation Means…………
Exercises
Goods are things that
people produce – products
you can touch, such as a
coffee machine. Services are
activities people do to earn
money, such as education.
Exercise 1.4
Where goods are made
Find the following goods in your classroom and list where they were made.
Goods
Country made in
shoes
scissors
Goods
shirt or jumper
Country made in
Pencil case
watch
exercise book
lunchbox
computer
library book
whiteboard
markers
Both exports and imports are important for the global community.
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Businesses sell their goods and services for a profit, so their exports earn
money from overseas. Over 20 per cent of Australia’s Gross Domestic Product
(GDP) comes from export earnings.
Export businesses have to compete with the best from all over the world
so they develop world-class business practices. This means they become
stronger businesses at home as well.
Small and medium sized businesses (SMEs) can now export more easily,
bringing more money into local communities.
Exporting businesses tend to pay their workers higher wages and provide
more training. They are usually more innovative and grow faster than nonexporting businesses.
When we buy imports we can choose from a greater range of goods and
services.
When we buy goods and services from developing countries we can help
their businesses to grow and employ more workers.
Buying products from overseas that Australians are not good at producing
allows us to concentrate on goods and services that we are good at producing.
We call this specialisation.
Global Connections—Page 4
Exercise 1.5
Australian exports and imports – an introduction
Study the table of Australia’s top five exports and imports for 2007.
1.
2.
3.
4.
Sort Australia’s top five exports and imports into two columns: ‘goods’ and
‘services’.
Give one reason why coal was a top export in 2007.
Give one reason why tourism was a main service export in 2007.
Study Australia’s top imports for 2007 and discuss which ones would be used
mostly by businesses to produce goods and services and which ones used
mostly by consumers.
Australia’s top five
Exports in 2007
Imports in 2007
Iron ore
Motor vehicles
Coal
Crude petroleum
Personal travel
Education
Refined petrol
Gold
Freight transportation services
Tourism
Exercise 1.6 International trade game – The Circle Makers
The Circle Makers is a game in which groups
discover some of the basic economic principles
in international trade. Total time required for this
exercise is approximately one hour.
Exercises
Chapter 1—Globalisation Means…………
Teacher preparation
Collect four boxes and label them Alpha, Beta, Gamma and Delta, the names of four
imaginary countries. Place objects in the boxes as follows. Photocopy the paper money
(Appendix 2) and store a stapler for a later stage of play. Read the detailed notes in the
answers section.
Objects for each country’s box
scissors
sheets of used A4 paper
rolls of sticky tape
rulers
pens or pencils
Alpha
1
20
1
1
1
Beta
3
10
1
2
2
Gamma
2
Delta
4
14
16
1
2
2
1
1
1
Global Connections­­—Page 5
Exercises
Chapter 1—Globalisation Means…………
Introduction
The class should divide into four
countries, named Alpha, Beta,
Gamma and Delta, and each take
their prepared box. This is a game
where each of the four countries
tries to make as many paper
circles as possible in a set time
and sell them to the world market,
represented by the teacher. At the
moment paper circles are very
popular and sell for $10 each.
Play
Each paper circle must be 3cm wide and made from a piece of paper as long as an A4
sheet of paper is wide (21cm) with a 2cm overlap, sticky-taped closed. Any circles that
do not meet these requirements cannot be sold. Countries can only use what is in their
box to make circles.
Students have 15 minutes to make as many circles as possible. The teacher will inspect
the circles for quality and pay groups $10 for every correct circle.
After the first 15 minutes students should discuss what might have helped them to
make circles faster. If they need more stationery they can trade with other groups for
the next 10 minutes, swapping items for items (bartering) or sell items for money.
When trading ends, the teacher announces that the price has dropped to $5 each
because there are so many circles (an over supply). A new technology, called a stapler,
has become available that allows circles to be made much faster. The stapler is available
to the highest bidder. Countries have five minutes for discussion before the teacher
auctions the stapler for the highest price.
Allow ten more minutes of circle making and pay $5 for each circle.
Students should then
•
•
•
•
•
•
identify what helped them to make the most profit in the game
identify what helped some countries to make more circles, raw goods (paper)
or tools (scissors) to make the rings
discuss whether profits improved when they could trade to get tools and
materials
discuss why the price dropped and how they felt when it did
discuss how the new technology, the stapler, influenced the production and
supply of circles
predict what they could have changed to make their product more popular
(colours, sizes) and how the improvements may have affected the price.
Global Connections—Page 6
Exercise 1.7
1.
2.
3.
4.
The Circle Makers – extension
Give the stapler to Beta and reorganise the countries so that half of the
students in Beta join Delta. (The other two countries remain the same.)
Students produce more circles for 10 minutes. Which team produces the most
circles in this 10 minute period – the team with the technology (the stapler)
or the team with a lot more workers?
(a) Discuss whether it is better to have more workers or better technology
and if there is room in the world for both production strategies.
(b) Customers in Australia can choose to buy a car made with cheaper labour
and materials (a Hyundai from Korea), or a more expensive car made
with high technology (a BMW from Germany). Discuss the benefits of
buying the cars in this example. List some other products produced with
either, very good technology or cheaper labour.
(c) Discuss why it is important to provide consumers with choice and why
Australians can buy products of different price and quality made in
different countries.
Explain what is likely to happen to the price of the paper rings once Beta
starts using a stapler. Why is this price movement likely to happen?
If the ‘country’ with the stapler can make paper rings cheaper, explain what
the other ‘countries’ could do to keep selling their product.
The stapler was a new technology that allowed one ‘country’ to produce the
paper rings more quickly. List some other examples of technology that have
improved the way we make and sell products.
Globalisation means that businesses can even specialise in just making
a part of a product. Product parts can be made in several countries, with
each country specialising in different stages. An Australian business, for
example, might design a product, buy some major parts from Thailand
and then have it assembled in China.
Exercises
Chapter 1—Globalisation Means…………
Global Connections­­—Page 7
Exercises
Chapter 1—Globalisation Means…………
Exercise 1.8
1.
2.
Specialisation
In pairs, complete the following table by matching each export product with
the country that specialises in exporting that product: the United States of
America (USA), China, New Zealand (NZ), Saudi Arabia, Sri Lanka, Argentina
and Taiwan. Give possible reasons why these countries specialise in these
products or services. (Note: countries are usually good at producing a number
of goods and services.)
The first row is an example. Country fact sheets at www.dfat.gov.au/geo/fs
are helpful.
Consider some possible reasons for this specialisation, such as good climate
or large work force.
Export product or service
Education
Electrical consumer
products
Oil
Wool
Beef
Tea
Motor vehicles
Clothing and footwear
Global Connections—Page 8
Country
Australia
Possible reasons for specialisation
Skilled teachers, quality
institutions, close to Asia
Chapter 1—Globalisation Means…………
Part B
Global Communications
New
technologies
allow
us
to
communicate around the world faster
and easier than ever before. We are
interconnected through systems such as
communications satellites, global media
organisations, the Internet and mobile
phones.
Exercise 1.9
Communication tools in my generation
When your grandparents were young, they received information more slowly than we
do today. List the modern ways in which we communicate as well as the benefits and
problems of each new and old communication tool.
Letters, telegrams
Benefits and
problems of old
tools
Today’s
communication
tools
Benefits and
problems of new
tools
Black and white
television
Drive in theatres
Radio, record
player, cassettes
Fixed line
telephone
Black board, slate
Personal banking
Communication has improved in stages as each invention became a stepping stone to
the next.
•
•
•
•
•
Wired telegraph and telephone led to wireless telegraphy in 1895. This was
firstly used for ship to shore communication, and eventually to commercial
radio in 1920.
The first television station was licensed in 1928, but it was not until the 1940s
that reasonable definition black and white television sets were produced.
Australia began television broadcasting in 1956.
Apple produced the first personal computer in 1976 and the World Wide Web
began in 1991.
From the 1980s people’s living standards increased so these consumer
products became more affordable.
Exercises
Grandparent’s
communication
tools
Global Connections­­—Page 9
Exercise 1.10
Communication technology users
Study Graph 1.1 and answer the following questions.
1.
2.
3.
Which technologies reached 50 million users in a short number of years?
True or false? People started using (adopted) the Internet four times more
quickly than computers.
How many hours a week do you spend using each of these technologies?
Graph 1.1 Timing the spread of technologies
(years from invention to 50 million users)
40
38
35
30
Years
Exercises
Chapter 1—Globalisation Means…………
25
20
16
15
13
10
4
5
0
Radio
Personal
Computers
Television
Internet
Source: Economist
Exercise 1.11
1.
2.
Communications – interpretation
Choose a communication tool from Exercise 1.9 and use mime to communicate
this tool to the class. The first student who guesses the tool correctly can
choose a different tool to continue the game.
or
Write a story about a person growing up in the early 1900s who has very
limited methods of communication. Imagine they find a time machine that
transports them to the year 2010. Describe how your character adapts to the
different communication methods used in the 21st century.
Exercise 1.12
Communications systems – artistic interpretation
Create an artistic interpretation, such as poster, mobile, model, cartoon strip or Flash
animation, to show how various technology systems work together to assist global
communications. Include Information Communication Technologies (ICT) used to
present television news, such as video cameras, the Internet, televisions, mobile phones
and MP4 players.
Global Connections—Page 10
Chapter 1—Globalisation Means…………
Exercise 1.13
Global media networks
1.
2.
3.
As a class define ‘global media network’.
In pairs find newspaper articles from global news media networks. These
articles often present news from one perspective (writer, news organisation,
country, region, political view) so try to compare stories and images from
different sources and comment on their perspective. (Hint: Look for initials at
the end of articles such as AP (Associated Press), AAP (Australian Associated
Press), AFP (Agence France-Presse) and Reuters.)
(a) Form reporting teams for a global television network. Each team prepare
a news report with pictures and interviews on one of the following
world issues.
• St Petersburg, Russia, has been hit by the biggest snowstorm in
100 years.
• An Australian dog, Jess, has won the world sheepdog trials in
Tullamore, Ireland.
• At a conference in Johannesburg, United Nations (UN) Secretary
General Ban Ki-moon, asked the world to do more to ease poverty.
• Architects in Italy are concerned that the leaning tower of Pisa may
collapse.
• Scientists in Antarctica have discovered the remains of a fallen
meteorite.
(b) Present the news report to the class. Explain the different ways this
report could be sent to Australia and how long each method would
take.
Exercises
We receive some of our news and entertainment via global media networks.
Global Connections­­—Page 11
Chapter 1—Globalisation Means…………
Part C
Global Migration and Travel
Australians are now more
globally connected with
people overseas through
migration and overseas travel
for work or holidays. Almost
4,940,600
Australians
travelled overseas in 2006 for
short trips of three months
or less.
Exercise 1.14
1.
People on the move
Prepare a column chart from the table.
Percentage of Australians
Who were born overseas
Exercises
Who travelled overseas
in 1982
22.0%
8.4%
in 2006
24.3%
23.9%
Source: Australian Bureau of Statistics (ABS)
2.
3.
4.
5.
6.
7.
If any of your parents or grandparents were born overseas, explain the
connections you have with their country of origin (food, traditions, languages,
visits to or from relatives, and so on).
The percentage of Australians who travelled overseas increased between
1982 and 2006 by (a) 23.9% (b) 2.3% (c) 15.5% or (d) 25.2%.
If you or your parents have travelled overseas, explain the reason for the trip,
the countries visited and what you or they learned about other cultures from
the trip.
List places where students in the class would like to travel and discuss
whether the money that tourists and business people spend would be helpful
to the economy of that country. Consider jobs, income, new services (Internet,
transport, roads, public buildings).
Tourism and education services are called ‘exports’ even though Australian
businesses provide these services in Australia to visitors from overseas, who
use money earned overseas. Use a flow chart or mind map to illustrate why
these services are exports. (Hint: show where travellers earned the money
and where they spent it.)
Create
a
poster,
PowerPoint
presentation, book or model to
illustrate possible problems created
by increased tourism and suggest
solutions
to
minimise
these
problems. (Hint: think of natural
tourism locations, such as the Great
Barrier Reef or very old, historical
buildings.)
Global Connections—Page 12
Chapter 1—Globalisation Means…………
Exercise 1.15
Reasons for Australian short-term overseas trips in 2006
Main reason for trip
Convention/conference
Number
Business
189,100
736,600
Visiting friends/relatives
1,244,900
Holiday
2,332,700
Employment
113,200
Education
56,800
Other/not stated
Percentage of total
267,200
Total
4,940,600
Source: Australian Bureau of Statistics (ABS)
2.
Calculate the percentage of each type of short-term Australian traveller then
draw a pie chart to show the different sizes of the groups. Colour and label
each ‘slice’ of the chart.
List some of the jobs (services) that cater to each type of traveller.
Exercise 1.16
1.
2.
3.
Destinations for Australian short-term travellers in 2006
Use an atlas to find the top travel destinations listed below, then colour them
on a world map (Appendix 1). Add a title and a legend to your map showing
the colour, country and its rank as an Australian travel destination.
Use an atlas, the Internet and brochures from travel agents to find major air
and sea routes and the travel times to these destinations. Add this information
to your map.
Compare the travel times by air and sea to these popular destinations, then
list the benefits and problems that have resulted from faster air travel.
Top Australian travel destinations in 2006
Rank
Destination
2
United States of America
1
3
4
5
6
7
8
9
10
Source: Australian Bureau of Statistics (ABS)
New Zealand
United Kingdom
Thailand
China
Fiji
Hong Kong
Indonesia
Malaysia
Vietnam
Exercises
1.
Global Connections­­—Page 13
Chapter 1—Globalisation Means…………
Weekly earnings have
increased so Australians
have more money as well
as more consumer and
lifestyle choice. Domestic
and overseas air travel is
also cheaper and faster.
Exercises
Qantas first flew from
Sydney to London in
1938 and the flight took
nine days. The cabin was
not pressurised and a
ticket cost $440, which
was more than a full
year’s salary. The average
weekly salary in 1938 was
$8. Today we can travel from Sydney to London in 22 hours and a return ticket costs as
low as $1615. The average full time weekly salary is now $1,041.60 (ABS, May 2006).
Exercise 1.17
1.
2.
3.
Lower travel costs
Calculate the percentage of average weekly earnings that people would pay
for a flight to London in
(a) 1938
(b) today.
List reasons for this change in air travel costs.
Draw a cartoon strip, which illustrates overseas travel for work or pleasure or
shows how lower travel costs help businesses to export or import goods and
services. Try to include some of the following ideas.
• As the cost of airfares comes down more people can afford to work
overseas as private contractors. (Contractors often have skills in high
demand and work on a contract for specific periods, such as one year.)
• As the cost of airfares comes down more small business owners can
afford to regularly travel overseas to meet export agents or partners.
• As the cost of transport comes down more small business owners can
afford to export or import goods.
Exchange rates
When we travel we must change our
Australian dollars into the local currency. We
do this by using the present exchange rate.
When a business sells its goods and services
to a customer overseas, the customer must
also change their payment amount into
Australian dollars.
Currencies are traded in pairs – one currency
is changed to another. The rate (or the
amounts) at which they are exchanged is
called the exchange rate. Major commodities,
such as coal and oil, are usually traded in US dollars. The US dollar is often treated as a
‘global currency’. The next most traded currencies are the euro, the Japanese yen, the
Global Connections—Page 14
Chapter 1—Globalisation Means…………
British pound sterling and the Swiss franc. These are called the major currencies. These
currencies are used because they represent stable economies where a lot of trade
takes place. When exporting their products and services Australian businesses often
use other currencies for trade.
Present currency rates are listed in daily newspapers or available online at sites such as
www.oanda.com or www.xe.com.
Exchange rates
Use exchange rate listings in the newspaper or on the Internet to convert one Australian
dollar (A$1) into the following currencies.
Currency
Exchange rate
euro
€
US dollar
US$
Japanese yen
¥
Swiss franc
CHF
British pound
£
Chinese yuan
Indian rupee
Thai baht
South Korean won
Exercise 1.19
1.
2.
Currencies
Match the currency to the country
Brazil
bolivar
Canada
krone
Denmark
baht
European Union
dollar
Hong Kong
riyal
Indonesia
won
Israel
rand
Japan
dollar
Malaysia
peso
Mexico
dollar
New Zealand
dong
Philippines
ringgit
Saudi Arabia
yen
South Africa
shekel
South Korea
rupiah
Taiwan
euro
Thailand
pound
Turkey
lira
United Kingdom
dollar
Venezuelan
real
Vietnam
peso
Exercises
Exercise 1.18
Not all members of the
European Union (EU) use
the common currency,
the Euro. Some members,
such as the United
Kingdom, use their own
traditional currency.
Choose two of these countries and research the products and services that
they buy and sell with Australia. Look at www.dfat.gov.au/geo/fs.
Global Connections­­—Page 15
Exercises
Chapter 1—Globalisation Means…………
Exercise 1.20 Globalise me
Meet Kelly, who is a global citizen. Colour the picture and answer the questions
below.
1.
2.
3.
4.
5.
What is Kelly’s destination?
Why is she travelling?
Name two communication technologies that Kelly is carrying.
What is Kelly’s nationality?
What do the initials FTA mean on Kelly’s newspaper?
Global Connections—Page 16
Exercise 1.21
Global citizen
Are you a global citizen? Use Kelly as a model to draw a picture of yourself in the frame
below and write points in the boxes that show you are a global citizen.
Think about where your shoes were made, the foods you eat, the languages you speak,
whether you use the Internet, where you or your family have travelled or perhaps you
know someone who sells goods and services overseas.
I am a global citizen because...
Exercises
Chapter 1—Globalisation Means…………
Global Connections­­—Page 17
Chapter 1—Globalisation Means…………
Part D
Global Culture
Exercises
Steve Irwin was a major Australian film and television exporter who earned a lot of
money overseas, created an adventurous image of Australia and attracted tourists to
Australia. He was a good example of an Australian cultural exporter.
Exercise 1.22
1.
Cultural exports
Pick your nomination for Australia’s ‘Best Cultural Export’ from the list
of Australia celebrities and productions below and write the reason you
nominated them inside the shape.
Dame Edna
Everedge
Your nomination:
Neighbours
Nicole Kidman
Home and Away
Shane Warne
Bindi Irwin
Cate Blanchett
Your reason:
Babe the Gallant Pig
The Wiggles
Silverchair
Baz Luhrmann
Powderfinger
Harry Kewell
Kylie Minogue
2.
List 10 food products now made in Australia, but once originated in another
culture. Examples are soy sauce, olive oil or Basmati rice.
Many Australians use products and services that originated overseas but are now
global. Food, sport, music and entertainment are popular global cultural exports.
Global Connections—Page 18
Exercise 1.23
1.
2.
Global cultural products
Draw a table like the one below and add seven more global culture
examples.
Conduct a survey of cultural products used in your school community. Record
if they use any of the 10 cultural products or services on your list. Add the
number of users to your table and then illustrate your results on a bar
graph.
Cultural product
Country of origin
Golf
Scotland
Sushi
Japan
Rap music
3.
r
United States of America
Circle words from the list of cultural products hidden in the ‘word find’. The
words may flow in any direction.
f
i
b
f
a
d
f
j
u
h
n
d
w
f
a
o
p
f
t
o
g
g
v
t
y
x
d
s
u
c
o
v
b
r
s
e
m
l
p
a
o
h
d
r
f
v
q
t
o
p
s
x
c
w
t
Number of users
o
w
r
c
t
k
actors
fashion
indigenous art
television shows
f
i
v
x
i
h
i
s
t
e
o
m
h
e
s
u
l
s
a
g
b
x
j
s
s
l
n
t
g
t
w
a
n
a
z
o
c
w
x
t
g
j
r
o
l
r
g
r
e
d
o
l
i
n
q
t
u
p
m
j
f
h
a
v
e
o
h
n
u
o
p
d
s
s
r
p
s
d
i
o
y
cartoons
films
music
tourism
o
d
n
i
o
q
m
o
k
a
n
k
c
w
u
s
n
z
i
m
o
i
k
x
j
v
s
s
b
l
i
e
e
d
m
i
r
l
a
x
j
f
s
z
c
k
f
w
e
t
r
Exercises
Chapter 1—Globalisation Means…………
o
computer games
food
sport
wine
Global Connections­­—Page 19
Exercises
Chapter 1—Globalisation Means…………
Exercise 1.24 Global brands
1.
Record the global brands you and your classmates have used over one week.
Search the Internet (www.google.com.au) to find the country of ownership
of each company and sort into two lists, Australian brands and another list of
overseas brands. Add to the lists below.
Overseas Brands
Nokia
Number of users
McDonalds
Harvey Norman
Toyota
Haigh’s
Chocolates
Sony
ANZ Bank
Number of users
Forty Winks
Nintendo
Australian Brands
Qantas
Some brands we call ‘Australian’ are in partnership with, or owned by, overseas
companies, for example ‘Arnotts’. Some famous overseas companies are franchises,
such as McDonalds, which means that a local Australian business (a franchisee) can
own a store here.
Exercise 1.25
Globalisation definition
Research other definitions of globalisation in books or on the Internet. Discuss
these definitions and then create a class definition. Display this definition in your
classroom.
Global Connections—Page 20
Chapter 2—Globalisation and Australia
Chapter 2 —Globalisation and Australia
Part A
Australia’s Patterns of Trade
Australia once had a protected
economy. Tariffs and quotas
kept prices of imported
goods very high and some
Australian businesses became
uncompetitive, that is, their
products were more expensive
or lower quality than similar
goods made overseas. Since
the 1980s the Australian
government
has
steadily
reduced barriers for imports,
giving us access to a wider
range of goods.
Australia needs to trade with the rest of the world because
•
•
•
although we live in a large, wealthy country Australian businesses are not
able to produce all the goods and services that consumers and businesses
need or want
our population is smaller than many other countries, so businesses cannot
sell as many products in Australia
exports earn money from overseas, which improves our living standards.
A brief history of Australia’s trade
Bound for Botany Bay
In 1788 the British established a penal colony
in New South Wales. Industries slowly began
to emerge, but settlers, soldiers and convicts
depended mostly on goods imported from
Britain in the early years.
Gold fever!
The gold rushes in the 1850s improved
the economies of the colonies and many
migrants came to look for gold. Ever
since this time, minerals including gold
have made up a large percentage of
Australian exports.
Global Connections­­—Page 21
Chapter 2—Globalisation and Australia
Australia ‘rode on the sheep’s back’
From 1850 to 1950 Australia’s main exports
were wool, wheat and gold. The Australian
colonies become the largest exporters of wool
to Britain.
Mineral boom
During the 1960s mineral exports grew
rapidly. Mineral exploration uncovered
rich deposits of many minerals
including nickel, copper, iron ore,
uranium and bauxite. By 1970 traditional exports such as wool and wheat made up a
smaller percentage of Australia’s exports and mining exports increased in value.
Recent diversification
Agricultural and mineral resources remain Australia’s most
important exports. They made up around 45 per cent of total
exports and earned $96.6 billion in 2007. However, exports of
services, such as tourism and education, have grown steadily. They
were 22 per cent of Australia’s total exports in 2007. Australian
exports of manufactured products such as motor vehicles,
scientific and medical equipment have increased rapidly.
Global Connections—Page 22
Exercise 2.1
1.
2.
3.
Australia’s export markets over time
(a) Describe the main change in Australia’s export markets from Federation
in 1901 to 1950–1951.
(b) Explain why the United Kingdom (UK) was our main market.
Describe the main changes in Australia’s export markets from 1950–1951 to
2000–2001.
(a) Describe how Australia’s export markets have changed from 2000 to
2006.
(b) Asian markets have become very important to Australia. List some
possible reasons for this change.
Figure 2.2
Export markets over time
a) Australia’s export markets in 1901
New Zealand
3%
France
5%
b) Australia’s export markets in 1950–1951
Other
9%
Other
22%
Egypt
2%
Belgium/Lux
3%
Germany
5%
United Kingdom
50%
Sri Lanka
6%
USA
7%
Exercises
Chapter 2—Globalisation and Australia
United Kingdom
33%
Germany
3%
Belgium/Lux
5%
Italy
5%
Japan
6%
South Africa
12%
France
9%
USA
15%
c) Australia’s export markets in 2000–2001 d) Australia’s export markets in 2006
Japan
19%
Singapore
5%
India
7%
Other
37%
United Kingdom
4%
Taiwan
5%
Taiwan
5%
Singapore
5%
U.S.A
10%
New Zealand
8%
Korea
8%
United Kingdom
9%
New Zealand
6%
China
6%
Republic of Korea
10%
Indonesia
4%
Japan
24%
China
17%
United States
11%
Source: Direction of Trade Series 2000–2001 and Trade at a Glance 2007, DFAT
Global Connections­­—Page 23
Chapter 2—Globalisation and Australia
Part B Australian Industry and Business
Exercises
Australians buy many things produced by overseas businesses (imported goods) and
sell many things overseas made by Australian businesses (exported goods).
Exercise 2.2
1.
International trade at your house
Investigate the range of Australian made and imported goods in your house.
Fill in the table with your results.
Room of my house
Living room
b) country
a)
b)
a)
a)
Garage, shed,
storeroom or hall
cupboard.
4.
5.
a) item
a)
My bedroom
3.
Goods made overseas
a)
Kitchen
2.
Goods made in Australia
a)
a)
a)
a)
a)
b)
b)
b)
b)
b)
b)
b)
b)
b)
Use the data from your table to draw a bar chart showing how many items
came from each country. Which country made most of your family’s goods?
On a world map (Appendix 1), colour in the countries where your imported
goods were made and draw arrows from those countries to Australia.
Explain the difference between domestic trade and global trade.
Discuss at least two reasons why governments might help businesses to
trade.
Global Connections—Page 24
Exercise 2.3
1.
2.
Trade and income
Examine the illustration and decide whether the following statements are
true or false.
(a) There is a link between a country’s trade activity and its citizens’
incomes.
(b) Increased trade activity from a country leads to an even greater increase
in citizens’ individual incomes.
Calculate how much a three per cent increase is (in dollars) for a person
earning $500 per week.
Exercises
Chapter 2—Globalisation and Australia
Classifying Australian products
In Australia we have product label regulations to help customers understand exactly
where the main ingredients are made and where products are manufactured. Two of
the main labels used are Made in Australia and Product of Australia.
Made in Australia – main components (or ingredients) can come from overseas but are
changed a lot when the product is put together in Australia. Businesses must spend 50
per cent or more of the production costs in Australia.
Product of Australia – each major component (or ingredient) of the goods must
originate from Australia, or virtually all of the production or manufacturing processes
must take place in Australia.
Australian businesses that meet these requirements can apply to use the
Australian Made labels. For a list of Australian businesses that pay to use
this label visit www.australianmade.com.au.
Global Connections­­—Page 25
Chapter 2—Globalisation and Australia
Export businesses in Australia
Most Australian export businesses are small
(employ less than 20 people) or medium sized
(employ less than 200 employees). Therefore
an ‘industry’, such as the car parts industry, can
actually be made up of many businesses.
Exercises
Global supply chains are becoming a common
way for Australians to sell their products
overseas. In the car industry, for example,
manufacturers now sell parts such as brake
and steering systems to car makers in many
countries.
Exercise 2.4
1.
2.
3.
Export businesses
How many export businesses were there in Australia in 2006–2007?
Calculate the percentage of small business exporters in 2006–2007?
Calculate the percentage of large business exporters in 2006–2007?
Figure 2.1
Australian goods export businesses by size in 2006–2007
(Number of businesses in each category)
Large,
4425
Small,
16555
Medium,
21665
Source: Australian Bureau of Statistics (ABS) Cat 5368.0.55.006
People who make products and services for export are directly involved in exporting.
Many more Australians are indirectly involved in exporting. Slim Secrets is an example
of a small business that exports a range of snack bars to a number of countries. The
farmers who produce the ingredients, such as the wheat and sugar, in the Slim Secrets
health bars are indirect exporters. These farmers also sell their produce to big, bulk
exporters, such as CSR, who sell sugar from hundreds of sugar farmers as a part of a
global supply chain.
Global Connections—Page 26
Chapter 2—Globalisation and Australia
Modern businesses need to be
flexible to respond to global
opportunities. Some businesses
design a product in Australia
and have it made overseas by
a partner, but with Australian
quality
control. Therefore,
products often have mixed
country-of-origin.
People can also be indirectly involved in exporting if they buy shares in
an export business listed on the Australian Stock Exchange (ASX), such as
Billabong or Qantas.
Exercise 2.5
Export business research (industry study)
As a class brainstorm all of the local businesses that export. Look at a range of
industries. Choose one business that interests the group and research its operations. It
might have a website, for example, that describes its products, business and overseas
markets or has stories about its business in the local paper.
Visit this local export business and interview staff about its global links.
1.
2.
Prepare a report to describe its
• product or service (what it is, origin of parts, design)
• markets (where the business sells its product or service)
• product changes to meet overseas needs (laws for labels or contents,
cultural differences, buyer preferences)
• partners (agents, distributors)
• global communication (Internet, fax, telephone)
• global travel (how often do staff visit their markets)
• opinion on global business (benefits to the business and community,
disadvantages of global business).
On a map (Appendix 1), show the flow of any production parts and the global
destinations of the business’s products or services.
Exercises
In a franchise agreement, the
owner gives assistance to a
business to develop a single
business and use its brand
name, logo and operating
techniques for royalty payments.
Macdonald’s is the best known global franchise. Each franchise store is usually owned
by a local business person. The profits are used by the business to employ local staff,
buy ingredients, pay rent and so on.
Global Connections­­—Page 27
Chapter 2—Globalisation and Australia
Part C
Goods and Services Trade
Goods are physical things, including raw materials and manufactured products.
Primary products are raw materials (commodities) that come from nature, such as
wheat and coal. Manufactures are goods that businesses have changed from raw
materials through a set of processes, such as wine and clothes. Merchandise is another
word for goods.
Services are activities that
people do to earn money,
rather than production of
physical goods. Australian
services include tourism and
education. Even if people use
a service in Australia, it is an
export when the customer
comes from overseas and uses
money earned overseas.
Global Connections—Page 28
Exercise 2.6
1.
2.
3.
4.
5.
6.
List the exports that are primary products in Table 2.1. What is their total
value?
List the exports that are services in Table 2.1. What is their total value?
List the exports that are manufactures in Table 2.1. What is their total value?
Calculate the percentage of primary products in this list of top 25 exports.
(Include your working in your answer: divide the total value of all primary
products in the list by the total value of the top 25 exports.)
Calculate the percentage of services in this list of top 25 exports.
Calculate the percentage of manufactures in this list of top 25 exports.
Table 2.1
Rank
Australian goods and services exports
Australian goods and services exports in 2007
A$million
1
Coal
3
Education services and travel for education
12,864
Personal travel including tourism
11,549
Aluminium ores (including alumina)
6,058
2
4
5
6
7
8
Iron ore
Gold
Crude petroleum
Aluminium
20,753
16,112
11,555
7,966
5,888
9
Professional, technical and business services
11
Beef
13
Other transportation services
15
Medicines (human and veterinary)
3,540
17
Refined petroleum
3,183
10
12
14
16
18
19
20
21
Natural gas
Passenger transportation services
Copper ores
Copper
4,488
4,207
3,821
3,764
3,202
3,066
Wool
2,746
Passenger motor vehicles (such as cars)
2,902
Business travel
2,536
Meat (excluding beef)
2,028
Zinc ores and concentrates
24
Wheat
25
5,073
Alcoholic beverages (mainly wine)
22
23
5,743
Zinc
Total value of these top 25 exports
Total value of all exports in 2007
Exercises
Chapter 2—Globalisation and Australia
2,534
1,960
1,704
149,242
216,253
Source: DFAT
Global Connections­­—Page 29
Chapter 2—Globalisation and Australia
Exercise 2.7
1.
2.
3.
4.
5.
6.
List the imports that are primary products in Table 2.2. What is their total
value?
List the imports that are services in Table 2.2. What is their total value?
List the imports that are manufactures in Table 2.2. What is their total value?
Discuss possible reasons why Australian businesses both export and import
cars?
Which imports would be used a lot by businesses (as business inputs) to help
produce goods and services?
Explain how imports used mainly by business, called ‘business inputs’, can
help a business. Consider how businesses use computers, raw materials and
transport.
Table 2.2
Rank
Australian goods and services imports in 2007
1
Crude petroleum
3
Personal travel including tourism
2
4
5
Exercises
Australian goods and services imports
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Passenger motor vehicles
Refined petroleum
Freight services
13,497
8,235
8,161
Medicines (human and veterinary)
6,437
Passenger transportation services
Gold
Telecommunications equipment
6,658
6,128
6,125
Motor vehicles for transporting goods
5,722
Civil engineering equipment
3,451
Royalties and licence fees
Professional and business services
Aircraft and parts
Business travel
Motor vehicle parts
Measuring and controlling instruments
Furniture
Other electrical machinery
23
Televisions
25
13,849
6,904
Toys, games and sporting goods
24
14,648
Computers
21
22
A$million
Computer parts
Pumps for gas
Paper and paperboard
Total value of these top 25 imports
Total value of all imports in 2007
Source: DFAT
Global Connections—Page 30
3,518
3,413
2,990
2,667
2,573
2,521
2,435
2,350
2,182
2,167
2,156
2,109
2,094
132,990
234,083
Home consumers are not the only people who buy imports. Companies import many
goods and services to help them run their businesses more effectively (business
inputs). Both businesses and home consumers use some imports, like computers and
passenger motor vehicles.
Exercise 2.8
Give an example of a product or service from each sector in Figure 2.3 or 2.4.
Brainstorm some reasons why the value of Australia’s exports has risen and
fallen over the past 13 years (Table 2.4). Consider events in both Australia
and overseas, such as trade agreements, Sydney Olympics, exchange rate
movements, terrorist attacks, drought and health scares like the SARS
outbreak.
Take one broad export category, such as services, and predict what type of
event could improve export earnings.
Exports are grouped under different headings for different audiences.
Prepare a two-column table with the headings: ‘Rural exports’ and ‘Mineral/
fuel exports’. Sort the jumbled selection of 2007 exports into their correct
columns.
ura
ions
arat
p
e
r
al p
cere
crude
leum
m
aluminium ores
Beef
od
wo
barley
w
ra
Figure 2.3
fruit an
d nuts
s
hip
c
es
d
hi
a
s
kin
s
nd
iron
ore
and cu
rd
es
or
rea
cheese
al
dc
ne
et
an
sand and gravel
sto
ans
tace
crus
wool
m
lk
erals
coal
us
mi
copper ores
crude min
io
eed
al f
m
ani
o
cott
ec
pr
wheat
natural abrasives
petro
n
nium
roleu
m
4.
meat
res
el o
nick
d pet
3.
l ga
refine
1.
2.
Exports by sector
Exercises
Chapter 2—Globalisation and Australia
ra
natu
s
Exports of goods and services by sector 2007
Gold
5%
Other goods
7%
Resources
34%
Manufactures
21%
Rural
11%
Services
22%
Source: DFAT
Note: Primary products include rural and resources sectors.
Global Connections­­—Page 31
Figure 2.4
Exports by sector over time 1993–2006
45.0
40.0
Percentage of Total Exports
35.0
30.0
Rural goods
Services
Resources
Manufactures
Other goods
25.0
20.0
15.0
10.0
5.0
0.0
19
93
19
94
19
95
19
96
19
97
19
98
19
99
20
00
20
01
20
02
20
03
20
04
20
05
20
06
Exercises
Chapter 2—Globalisation and Australia
Source: DFAT
Exercise 2.9
Export celebrity heads
Look at the list of some of Australia’s exports. Three students should sit at the front
of the class with their backs to the board. The teacher will write a different export
from the list above each of their heads. The three students in turn can ask the class
questions that require ‘yes/no’ answers to guess the export behind them. The first of
the three to guess correctly wins.
Wool
Timber
Wine
Coal
Cheese
Tourism
Beef
Cars
Fruit juice
Toys
Cotton
Lobsters
Glass
Gold
Opals
Sugar
Freight services
Global Connections—Page 32
Fish
Steel
Furniture
Wheat
Petroleum
Computer parts
Honey
Chocolate
Pearls
Education
Films
Solar cells
Milk
Chapter 3—Globalisation Drivers
Chapter 3—Globalisation Drivers
Part A
Trade in History
Satisfying our needs and wants is an age-old problem. Long ago, when people lived
in small groups or tribes, they had to be totally self-sufficient. They either hunted or
gathered food. Their shelter was very basic and they usually made their clothes from
animal skins. Survival was the ‘name of the game’.
Over time, people made small improvements. Gradually through farming, their food
supply became more reliable and they had extra food – a surplus. They were able to
trade the extra goods they produced by swapping some of their surplus goods for the
goods of the other tribe – a stone axe in exchange for some skins. Bartering, exchanging
one item for another, was the only way to trade because there was no money.
Humans have been trading
and migrating for thousands of
years, but it involved only a small
number of people until transport
and communication advances
allowed it to spread and become
truly global.
Trade between nations existed in
2000 BC when Northern Africans
traded their dates and clothing
for Assyrian spices and olive oil.
By 500 BC Chinese merchants
were exporting silk and jade to
India and Europe.
Global Connections­­—Page 33
Chapter 3—Globalisation Drivers
Explorers such as Christopher Columbus, Vasco da Gama and Magellan set out from
Europe to find sea routes to Asia for trade and their discoveries eventually led to
European colonisation, trade and multinational corporations, such as The Dutch East
India Company (formed in 1600). These developments, however, were still not truly
global. Trade back then only involved moving a few products to a limited part of the
world.
The Industrial Revolution in the nineteenth century began the ‘Golden Age’ of world
economic growth. The steam engine lowered transportation costs and made large
factories more economical. Large factories allowed businesses to produce more for less
cost per item and this led to expanded trade.
Economic growth was interrupted in the twentieth century because of two world wars,
the Great Depression and protectionism. The world economy only recovered after a
number of international economic institutions were set up at the end of World War II,
including the World Bank in 1945. In 1947 a number of countries agreed to some trade
rules and tariff reductions known as the General Agreement on Tariffs and Trade (GATT).
This second ‘Golden Age’ continued until the OPEC oil price rises and the Vietnam War
in the 1970s.
Exercises
A third ‘Golden Age’ began in 1994 when the World Trade Organization (WTO) replaced
the GATT. The WTO aims to be more inclusive than the GATT agreement and has
undergone many improvements.
Exercise 3.1
1.
Trade in history activity
Draw and complete the following trade in history table
Period in time
Before Christ
(or Before
Common Era)
Goods traded Transport used Distances
travelled
Global or
local trade?
Renaissance
19th Century
20th Century
2.
Imagine that you live on an island in the Pacific Ocean that has never had
contact with other countries at any time in history. Circle the things you
might not have
tomatoes
spices
tourists
games
Global Connections—Page 34
fish
wool
rice
metal knives
books in other languages
some kind of transport
coconuts
milk
Exercise 3.2
Role play
In 1860
John lives on a farm and Melissa owns a clothing factory in the nearest town. Melissa
would like to buy some of John’s wool. They meet at Melissa’s factory and have the
following conversation.
Melissa:
John:
Melissa:
John:
Melissa:
Thank you for meeting with me, kind sir. I read in the newspaper that
you have wool to sell.
That I do. Would you like to buy some of my wool?
Yes, I would like to buy five bales of wool. Can you deliver it to my
factory?
With pleasure. My men and I will bring it by horse and cart to your
factory tomorrow.
That would be excellent. Here is a deposit. I will pay you the rest in cash
when you deliver the wool.
In 1960
Imagine 100 years later that John lives on a farm in Victoria and Melissa has a factory
in Sydney, New South Wales. They still need to trade with each other but now they have
more modern technology to help them.
1.
2.
List inventions that might have made it easier to trade in 1960 such as
telephones, faster mail delivery and modern banks.
Prepare a script and act out the conversation between John and Melissa in
1960.
Exercises
Chapter 3—Globalisation Drivers
In 2008
John and Melissa now live in different countries.
3.
Prepare a script to show how their methods of communication and trade
have changed. Would they need to meet in person or communicate through
fax, email or video conference? How would the wool be delivered to another
country and how would they pay?
In 2050
Imagine that Melissa and John live in 2050. They live in different countries (or planets!)
What technology and inventions might help them to trade more easily in the future?
4.
Prepare a script of their business conversation then act it out.
Global Connections­­—Page 35
Chapter 3—Globalisation Drivers
Part B
Globalisation Drivers Today
Some things making globalisation happen faster are
•
•
•
•
technologies: new transport,
communication and information
technologies make it easier and
cheaper to trade internationally
(see Chapter 1, Part B)
demand: increases in income
and spending money (disposable
income) mean that people are
able to demand new and different
products and services, especially
in developed countries
trade liberalisation policies: many
governments have lowered or cut their trade barriers. They can do this by
reducing barriers for all products from all countries or by countries making
agreements with other countries, such as free trade agreements (FTAs)
business practices: businesses try to increase profits by cutting costs instead
of raising prices. This involves globalising the production process so different
parts of the process can take place in different countries.
Exercise 3.3
Exercises
1.
2.
Demand drives globalisation
Has your family helped to drive globalisation forward by buying items listed
below? Write ‘yes’ or ‘no’ beside each item in the list.
• A phone (fixed or mobile phone)
• A computer
• Internet access
• Foods produced overseas
• A passport
• Music by overseas artists
• Clothes made overseas
• A car made overseas.
New technologies have allowed more people to trade, travel and communicate
globally. Before new technologies most people could only do this locally. As a
class, construct a table of Technology advancing globalisation and Reasons for
globalisation. Some examples have already been done for you.
Technology advancing
globalisation
Reasons for globalisation
Refrigerated shipping
containers
• maintaining food quality over shipping distances
• wanting to access new markets
• wanting different types of food
Satellites
Bio technology
• wanting to communicate faster to distant places
• wanting to predict the weather
• wanting quick access to world news/events
• improving people’s health
• wanting more efficient food production
How many of these would have been relevant 100 years ago?
Global Connections—Page 36
Exercise 3.4
Exporting made easier
Complete the table to show how changes have made exporting easier for businesses.
Export problems
in the past
Export problems overcome today by
Distance to traditional
markets
Food products spoilt
Trade barriers (tariffs,
quotas)
Product doesn’t suit all
countries
Communication by sea
mail, telegraph
Consumer goods too
expensive
Export costs too high for
small businesses
Part C
Trade Agreements
Since the 1980s governments have
negotiated trade agreements with
each other to remove trade barriers
and increase trade liberalisation.
The Australian Government believes
that its economy is improved and
consumers are better off without trade
barriers between countries. Goods for
consumers are cheaper and locally made
products become more competitive
when governments remove tariffs and
subsidies.
Exercises
Chapter 3—Globalisation Drivers
Total free trade between all countries is not likely because all nations have trading
rules that apply to certain products, such as drugs. Goods can also be restricted or
banned for quarantine reasons.
The Australian Government has encouraged trade liberalisation by participating in
•
•
•
multilateral agreements – involving many countries, such as the World Trade
Organization (WTO)
regional agreements – the Asia-Pacific Economic Co-operation (APEC)
bilateral agreements – free trade agreements (FTAs) between two countries.
These limit protection, subsidies and administrative barriers in specific
industries. Australia currently has FTAs with four countries: New Zealand,
Singapore, Thailand and the USA.
Global Connections­­—Page 37
Chapter 3—Globalisation Drivers
Trade
agreements
remove
Trade
barriers
to promote
Trade
liberalisation
Trade barriers
Some governments use trade barriers to
protect their domestic markets. They may try
to establish some industries or some groups
may want to maintain a particular industry
(whether economically competitive or not).
An example is the agricultural industry, which
faces barriers in many overseas markets, such
as Europe.
The most common trade barriers include
tariff – tax charged on imports that
raises the price of the imported
item
quota – limit on the amount of
imports a country will allow
subsidy – a government payment
made to local producers to help keep
their prices low or stay in business
embargo – stops certain items being
imported.
•
•
•
Exercises
•
Exercise 3.5
Trade protection in history
Before Federation in 1901 Australian states were separate colonies.
Queenslanders had to pay tariffs when selling products to Victorians
because Victorians wanted to ‘protect’ their jobs. They thought if a
Queensland product sold in Victoria was cheaper than a similar Victorian
product, the Victorian producers would be out of work. After Federation
in 1901, internal tariffs were abolished and there was free trade between
all Australian states.
In small groups read the extract and then answer the questions below.
1.
2.
3.
4.
Discuss the effect of these tariffs on food prices and other consumer goods.
Discuss the effects that protection from wider competition would have on
workers’ skills and productivity (the amount they produce).
Discuss whether tariffs were fair to workers and customers.
Select a spokesperson to present your group’s ideas to the rest of the class.
Global Connections—Page 38
Exercise 3.6
Trade agreements
You are a local exporter of a new
and
exciting
product
named
‘Gobbledegook’. You have a strong
customer base in Australia and you
have decided to sell your product
overseas. You have heard that it is
easier to export to countries that have
trade agreements with Australia.
Your first shipment is ready and you
have 1000 units for sale. You want to
sell each unit of ‘Gobbledegook’ for
A$2.50 each but need to calculate
the cost to consumers once overseas
tariffs have been added.
1.
Calculate the final sale price for each country.
Country
New Zealand
0%
Malaysia
22%
Saudi Arabia
29%
Thailand
10%
United States
India
Tariff
Ireland
2.
Unit cost plus tariff
5%
33%
Exercises
Chapter 3—Globalisation Drivers
40%
Discuss whether you will be able to sell ‘Gobbledegooks’ to customers in
countries with high tariffs or if your product will become too expensive.
Consider other ways ‘Gobbledegooks’ will need to compete with locally made
products (high quality, brand status, and so on).
The Organisation for Economic Cooperation and Development (OECD) has calculated
that governments in OECD countries paid their farmers about $US311 billion in 2001 to
keep their farm produce cheaper than countries that have more efficient farms. This is
roughly six times the amount spent on aid for developing countries.
Global Connections­­—Page 39
Exercises
Chapter 3—Globalisation Drivers
Exercise 3.7
1.
Subsidies
Read the following case study and discuss how subsidies can hurt developing
countries.
In 1999–2001, the average cow in
the European Union (EU) received
subsidies of approximately $US2.20
per day. Compare that with the 47 per
cent of people in Africa who, in 1999,
had incomes below $US1 a day, and the
75 per cent who had incomes below
$US2 per day. The average European
cow received a bigger subsidy than the
average African had available to live on.
Many developing countries will benefit
if these sorts of subsidy practices stop
in Europe and the USA. Developing
countries’ exports will be cheaper in
comparison and this means they will
be able to earn more to improve their
living standards.
Source: DFAT
2.
Use the Internet to answer the following questions.
(a) What are the aims of the WTO? Which countries are members of the
WTO?
(b) What is the main job of the OECD? Which countries are members of the
OECD?
(c) What are the aims of APEC? Which countries are members of APEC?
(d) Research the free trade agreements (FTAs) Australia has in place or is
negotiating. Explain why Australia might be interested in having closer
trade relations with these countries. (www.fta.gov.au)
Part D
Globalisation and Education
Businesses produce specialised products and services for the globalised marketplace.
Our educational levels are also improving and businesses have changed to make better
use of employees’ higher-level skills. Some jobs, such as factory work, have moved to
countries with lower education levels and most jobs in Australia now need higher
educational qualifications or training than a generation ago.
Higher education helps Australians to become more specialised in particular work
and businesses that employ well-educated workers are successful in global markets.
To keep costs down businesses often have simple manufacturing work done overseas
and do the design and complex manufacturing in Australia.
Global Connections—Page 40
Chapter 3—Globalisation Drivers
Exercise 3.8
Education levels
(a) Draw up a table with three columns and ten rows using the headings shown
in the table below. Match the following jobs to the appropriate level of
training or education.
hion
fas
ve
r
technicia
n
er
ign
es
bd
we
cabinet
maker
doc
tor
graphic designer
ical
med
exporter
er
in
ra
dri
mer
fra
ure
pict
t
al
on
er
plumber
rs
pe
compute
r
ter
pain
her
sales assistant
haird
resse
r
waiter
co
uri
teac
er
gn
desi
physio
tist
scien
therap
ist
University degree
courses
Engineer
Certificate and diploma
courses, traineeships and
apprenticeships (TAFE)
beautician
On-the-job training (no
formal qualifications
necessary)
fire fighter
Employees with higher education and training levels tend to change jobs more
frequently and take shorter contracts than previous generations. They also update
their skills regularly to remain competitive in a more global labour market. Export
businesses value well educated employees, as they tend to offer their staff more
training and higher wages than businesses that do not export. People who do not
develop strong skills may fall behind in this new, flexible labour market.
Exercise 3.9
1.
2.
Globalisation drivers
Discuss and list the positive and negative effects of the globalisation drivers:
technology, demand, trade liberalisation policies, business practices and
education.
Show the consequences of these drivers in a diagram, for example,
Demand
businesses create new jobs
encourages invention of new goods and services
Exercises
(b) Add three more jobs to each column.
(c) List jobs that will be important in the globalised world of the future and
explain why they will be important.
people develop businesses to produce the inventions
Global Connections­­—Page 41
Chapter 3—Globalisation Drivers
Exercises
Exercise 3.10 Global trade game
Global Connections—Page 42
Chapter 4—Global Responsibilities
Chapter 4—Global Responsibilities
Countries can improve their living standards and individual businesses can improve
their business practices with global trade.
Part A
Country Development
Global trade is an important part of economic growth. Trade can improve peoples’
living standards, particularly in developing countries, because when businesses sell
overseas they can earn more profits, expand production and employ more people.
When countries allow imports it encourages competition and their people have greater
choice of products and services for lifestyle or business development.
Trade helps a country grow because
•
•
it encourages businesses to specialise and produce in areas of expertise
it allows local producers to sell to more people, produce more efficiently, keep
costs down and often employ more workers
it gives businesses access to new technologies and ideas, increasing the
productivity of local workers and managers
removing tariffs on imports makes them cheaper for consumers, allowing
them to buy more with their money and improve their living standards.
Developed countries can help developing countries to sell their products. In 2003
Australia began duty-free and quota-free entry for all products from the 49 least
developed countries and East Timor. Products from these countries are now cheaper
for Australians to buy, which may increase sales and income for the producers in
developing countries.
Source: DFAT (www.dfat.gov.au/trade/downloads/trade_dev_poverty.pdf)]
Exercise 4.1
Least developed countries
In pairs, prepare a poster to highlight the main features of one of the following poorest
countries. Colour it on a world map (Appendix 1) and include information about its
economy, culture, government and human development levels. Discuss why the country
is poor and underdeveloped. (Useful sites are www.cia.gov/library/publications/theworld-factbook/index.html and www.dfat.gov.au/geo/fs/)
1. Afghanistan
17. Equatorial Guinea
2. Angola
18. Eritrea
3. Bangladesh
19. Ethiopia
4. Benin
20. The Gambia 5. Bhutan
21. Guinea 6. Burkina Faso 22. Guinea-Bissau
7. Burma
23. Haiti 8. Burundi 24. Kiribati
9. Cambodia
25. Laos 10. Cape Verde 26. Lesotho
11. Central African Republic
27. Liberia 12. Chad 28. Madagascar
13. Comoros 29. Malawi
14. Congo, Democratic Republic of 30. Maldives 15. Djibouti 31. Mali
16. East Timor
32. Mauritania
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Exercises
•
•
Mozambique
Nepal
Niger
Rwanda
Samoa
Sao Tome and Principe
Senegal
Sierra Leone
Solomon Islands
Somalia
Sudan
Togo
Tuvalu
Uganda
Tanzania
Vanuatu
Yemen
Zambia
Global Connections­­—Page 43
Chapter 4—Global Responsibilities
Trade reduces poverty
Countries can improve their economies when they open their markets to international
trade and encourage their businesses to export. Trade helps to lift many people out of
poverty. A common measure of poverty is people who live on less than $2 a day. While
the situation is improving in many developing countries, they still cannot afford many
things that people in Australia take for granted.
Figure 4.1
Poverty has fallen in East Asian countries that trade
(Estimated people living on $2 a day)
100
Laos
Vietnam
90
percentage
Exercises
80
Cambodia
Indonesia
China
70
60
PNG
Philippines
Thailand
50
40
30
20
Malaysia
10
0
1990
2007
Source: World Bank 2007
Exercise 4.2
1.
2.
3.
4.
Reducing poverty
List some of the reasons why most East Asian countries in Graph 4.1. have
reduced poverty.
Discuss some of the possible reasons why poverty has increased recently in
countries such as PNG.
Prepare presentations using charts, PowerPoint or overheads to summarise
how poverty can be reduced by (a) international organisations, (b) developed
countries such as Australia, (c) developing countries and (d) private
businesses.
“If Africa, East Asia, South Asia and Latin America were to increase their share
of world exports by one per cent, the resulting gains in income could lift 128
million people out of poverty.” (Oxfam)
(a) Suggest ways these regions could increase their share of exports.
Global Connections—Page 44
(b) Investigate the following organisations. Find out what the organisation
does, how it benefits people in developing countries and how Australians
help the organisation.
AusAid, Care Australia, World Vision, Grameen Foundation, United
Nations and Oxfam.
(c) Organise a class debate on the topic: ‘Trade is better than aid for poor
countries’
(For research visit the AusAid website on www.ausaid.gov.au or the
publication ‘Trade, Development and Poverty Reduction’ at www.dfat.
gov.au/trade/downloads/trade_dev_poverty.pdf)
Part B
Business Practices
Businesses have ethical, social and environmental responsibilities to their local and
overseas communities. This responsibility includes making profits to pay their workers,
suppliers and taxes.
All businesses in Australia must also follow laws designed to protect their workers,
business partners, suppliers and their customers. Most accept these responsibilities
and many have built businesses that are both profitable and ethical.
Sustainable business practices
Fortunately, most businesses are moving away from selfish
practices of the past and realise that sustainable development
achieves a good balance between economic, community and
environmental needs. Businesses that take care of their triple
bottom line – social, ethical and environmental responsibilities –
often have improved business
over time.
Exercises
Chapter 4—Global Responsibilities
Unethical businesses do not live
up to community expectations
and
will
eventually
be
spotlighted, criticised and
sometimes penalised. On the
other hand, ethical behaviour
earns public approval.
Businesses need to be ethical in their activities. The
consumer protection laws, for example, say that a business in Australia cannot make
false claims when producing or advertising a product. They also cannot refuse to give
a refund or fix a faulty product.
Ethics is the set of standards of conduct and moral values that most
people consider to be ‘right’.
Global Connections­­—Page 45
Exercises
Chapter 4—Global Responsibilities
Exercise 4.3
Case study – code of conduct
A business can develop an ethics policy and a code of conduct to show its values to
customers, employees, business partners and investors. These also provide goals and
behaviours that the business can measure over time.
‘Honest Joe’ is a fictitious Australian manufacturing company. This ethical business
has developed a code of conduct and a set of guidelines for staff to follow.
Read the ‘Honest Joe’ code of conduct below.
Honesty and Integrity: We carry out all business dealings with honesty
and integrity.
Fair Competition: We promote fair and honest competition amongst
businesses in our industry.
Confidentiality and Intellectual Property: We maintain confidentiality in
all our dealings with customers and business partners.
Best Practice: We adopt best practice principles and try to improve
productivity through the education and training of our employees.
Payment Practices: We have honest relationships with all our business
partners and make all our payments in a fair and timely manner.
Health and Safety: We provide a safe and healthy workplace for
employees.
The Community and the Environment: We respect our obligations to the
community and will help to protect the environment.
Laws and Regulations: We abide by all laws and regulations affecting our
industry and encourage our business partners to do the same.
1.
2.
3.
In groups discuss whether all of these headings are equally important.
Are there any other items that ‘Honest Joe’ should include in its code of
conduct?
Cut out and place the codes of conduct in a box. Each group will select one
code and prepare a role play that shows how the code of conduct helps the
business.
Exercise 4.4
Export opportunities
In groups identify and promote an export opportunity to demonstrate your
understanding of international trade.
(a) Research the product and service needs of people in another country, existing
Australian exports to that country and the cultural understandings that
would influence export business with that country.
(b) Identify a product or service that could be beneficial or in demand there.
(c) Design a promotional talk and brochures for potential buyers in that
country.
(d) Hold an international trade show. Present talks and brochures to the class.
(e) Explain how this export can benefit both Australia and the export market.
Global Connections—Page 46
Appendix 1—World Map
Appendix 1—World Map
Global Connections­­—Page 47
Appendix 2—Photocopy Master – Circle Maker Money
Appendix 2—Photocopy Master
Circle Maker Money
$10
$10
$10
$10
$5
$5
$5
$5
$1
$1
Global Connections—Page 48
Appendix 3—Glossary
Appendix 3—Glossary
Term
Explanation
Agricultural
products
Primary products from cultivation of land, such as beef, wheat, fruit.
APEC
Asia-Pacific Economic Cooperation established in 1989 in to promote
open trade and economic cooperation among Asia-Pacific economies.
Austrade (The
Australian Trade
Commission)
Helps individual Australian businesses to enter and become
established in overseas markets and attracts overseas investments.
Barter
Swap items for other items.
Bi-lateral
Agreements
Trade agreements between two countries, such as ANZCERTA
Business Etiquette
The social rules observed in each country when doing business
Business Ethics
The moral choices made by people in their business relationships
Commodities
Any articles exchanged but usually used to refer to raw materials
Communication
The mechanical or electronic ways of sending information
Comparative
Advantage
When one country has a lower cost in production of a product than
another
Consumer Goods
Goods intended for general consumption, such as food and clothing.
Culture
The way a group of people live that is passed from one generation to
another.
Department of
Foreign Affairs and
Trade
Responsible for policy and inter-governmental negotiations needed to
achieve our bilateral, regional and multilateral trade goals.
Distributor
An individual or company that buys and keeps a firm’s products and
sells them directly to buyers in the foreign market.
Dumping
Sell goods in foreign markets at lower prices than at home or below
production costs.
E-business or
e-commerce
Using computers and electronic communications technology to do
business.
Embargos
Certain types of imports are prohibited
Ethics
A set of standards of conduct and moral values that most people
consider to be ‘right’.
Exchange Rate
The price of one currency in terms of another.
Exports
Goods and services sold to foreign consumers, regardless of where the
transaction takes place.
Foreign Exchange
The sale or purchase of foreign currencies.
Franchising
The owner (franchisor) allows a foreign firm (franchisee) to develop
a business, use its brand names, logos and operating techniques for
royalty payments and provide on-going assistance, eg McDonald’s and
Perth’s Dome Coffees.
Free Trade
The absence of trade barriers, or restrictions on foreign trade
Free Trade
Agreement
An agreement between two or more countries that sees reductions
in barriers to trade such as tariffs, import quotas and government
restrictions on foreign ownership.
Global
Involving the whole world.
Globalisation
The process of increasing global interdependence between nations.
It involves the increasing integration of businesses and economies
through trade, communication, migration and shared culture.
Global media
networks
Organisations providing mass communication that reaches people in
many countries. These include television, Internet, films, newspapers,
magazines and radio.
Global Connections­­—Page 49
Appendix 3—Glossary
Goods
Things that people produce – products that can be touched
Gross Domestic
Product (GDP)
The total value of goods and services produced within a country in
one year, regardless of the citizenship of the producers
Imports
Goods and services bought from a seller overseas.
Manufactures
Goods that are changed from raw commodities through processes.
Merchandise
Physical goods such as raw materials, semi-manufactures and
manufactures.
Migration
Move from one country to another to live.
Multi-lateral
Agreements
Trade agreements between a number of countries, such as World
Trade Organization.
OECD
Organisation for Economic Cooperation and Development.
Primary product
Raw material (commodity) that comes from nature, such as wheat or
coal.
Product
The attributes and features of the good or service being offered for
sale including characteristics, quality, size, colour and packing.
Profit
The surplus left to a producer or an employer after paying wages, rent
and costs.
Protectionism
Various ways the production of a country can be protected from
competition by imports. See tariffs, trade barriers.
Quotas
Limits placed on the amount of a product to be imported annually.
Resources trade
Trade in natural resources, such as coal and iron ore.
‘Ride on the sheep’s
back’
Expression meaning that Australia’s wool exports largely supported
the economy.
Rural goods
Produce from agriculture.
Services
Activities people do to earn money – generally any activity except
agriculture, mining and manufacturing.
SMEs
Small to medium-sized enterprises. Their classification is based on
turnover, number of employees (under 5 for micro, 5–19 for small and
20–200 for medium sized businesses) and asset value.
Specialisation
People produce a narrow range of goods and services in which they
have expertise and in the most cost-effective manner.
Subsidy
A payment made (usually by a government from tax revenue) to help
the producer keep prices low or stay in business.
Supply chain
Network of suppliers, manufacturers, warehouses, distributors and
retailers that participate in the process from raw materials to finished
products. This involves a sequence of processes, with each process
adding value to the product.
Tariff
An import tax designed to ‘protect’ locally produced goods or services
from competition by overseas goods or services. The tax is passed on
to the consumer by the importer
Trade
International selling and buying of goods and services and making
investments in foreign countries.
Trade barriers
Ways that create barriers to trade between nations, such as
tariffs, subsidies, quotas, and less visible ways, such as quarantine
restrictions.
Trade liberalisation
Reductions in controls over trade that are occurring worldwide.
World Bank
Lends for projects that will assist the economic development of the
world’s economically poorest nations.
World Trade
Organization
International body dealing with the rules of trade between nations.
Began in 1995 replacing the General Agreement on Tariffs and Trade
(GATT).
Global Connections—Page 50
Appendix 4—Suggested Answers
Appendix 4—Suggested Answers
Chapter 1 Globalisation Means
Exercise 1.1
Australia’s links
Country
Connection to Australia
New Zealand
Sport, tourism, ANZAC tradition, source of migrants and the Closer
Economic Agreement(CER)
Indonesia
Trade, tourism (Bali), aid program
USA
Military co-operation, tourism, entertainment, food and fashion and
trade agreements
U.K.
Colonised Australia, military co-operation, trade, sport, travel and work
destination, source of migrants
China
Migration, trade, manufacturers and natural resources
Exercise 1.2
1.
Community groups – local and global
Five local community groups:
Fire Brigade – protects the community from house and bush fires.
Salvation Army –assists people in need of food, housing and counselling.
Football team – encourages local sport and social recreation.
Youth Group – Provides a safe environment for young people to socialise.
Band – Provides the community with a music focus.
2.
Group
What they do for the global community
United Nations
(UN)
Provides a forum for co-operation between countries to promote
international peace and security (formed in 1945).
International Red
Cross
Provides international aid to countries and communities in need.
World Trade
Organization
International body dealing with the rules of trade between nations.
Began in 1995.
Medecin Sans
Frontieres
Provides international medical and humanitarian aid to countries and
communities in need.
The World Bank
Lends money for projects that will assist economic development in
the world’s poorest nations.
3.
Australia has many links with the international community. These links are important
to Australia because they help us to be active participants in the world. Our global
involvement and responsibilities improve Australians’ understanding of the world
and make us richer people in all senses of the word.
Global Connections­­—Page 51
Appendix 4—Suggested Answers
Exercise 1.3
1.
2.
3.
Story starter
The term ‘global marketplace’ refers to the combining of once separate and distinct
national markets into one huge worldwide market.
The countries referred to include Italy, Singapore, China, United States of America,
Taiwan, New Zealand, Thailand and Belgium.
Without global trade consumers and producers would not have such a wide variety
of goods and services to select from. Domestically produced goods and services could
have higher prices and lower quality.
Exercise 1.5
Australia’s exports and imports – an introduction
1.
Goods
Services
Iron ore
Education
2.
3.
4.
Coal
Tourism
Gold
Crude petroleum
Motor vehicles
Personal travel
Freight transportation services
Refined petrol
Coal was Australia’s top export in 2007 because China is growing rapidly and is buying
large amounts of coal.
Tourism was a main export in 2007 as many people continue to come to Australia
following the Sydney 2000 Olympic Games and spent money that they earned
overseas.
Used mostly by business
Used mostly by consumers
Freight transportation services
Personal travel
Crude petroleum
Refined petrol
Exercise 1.6
Motor vehicles (used by both)
Refined petrol (used by both)
The Circle Makers – teachers’ notes
This activity provides a practical example of the basic economic principles of trade, including
access to raw materials and the allocation of resources based on how much people are willing
and able to pay for them.
Why some countries were able to make more circles than others.
•
•
•
Country Alpha had the most paper (raw materials) to make into paper rings. Did they
produce the most?
The scissors, sticky tape, rulers, pencils and students were all important to help change
the paper (raw materials) into the finished product. Therefore, while Alpha had more
raw materials, Delta had more tools make the paper rings. Did things improve when
countries traded goods?
How did ‘workers’ perform as a team in each country? Did everyone know what to
do? Did they share the work fairly amongst the workers? Did the workers specialise
(perform the tasks they were best at)? Did someone in the group organise the
process?
Why the price fell from $10 to $5.
Businesses set the price of a product by adding a profit margin to the cost to make it. The size
of the profit depends on how much buyers are willing to pay. For most products, people will
pay a lower price if there are plenty of the same product (a glut). For example, if you are hungry
and want to buy a slice of pizza, you might agree to buy one slice for $5. If you are less hungry,
you may only be willing to pay $3, particularly for a second slice. Each additional slice of pizza
will become less valuable to you. Similarly, as more paper rings were available, the less people
were willing to pay for them.
Global Connections—Page 52
Appendix 4—Suggested Answers
Why the stapler changed the production and supply of paper rings.
•
•
The stapler sped up making the paper rings. This represents improvements in
technology, which allow us to do things more quickly and easily, reducing the cost
and time to produce things.
Technology is moving at a faster rate today in part because of globalisation. New
technology transfers quickly between countries leading to increased production
capabilities.
Exercise 1.7
1.
(a)
The Circle Makers – extension
There is room in the world for both production strategies. Countries with more
workers often produce more agricultural and manufactured goods and those
with better technology often have higher levels of education and investment in
jobs using knowledge or skills, such as the design for products manufactured in
the factories.
(b) The benefits of buying a BMW and Hyundai: Expensive BMW car – safety features,
long lasting, stylish, high status. Cheaper Hyundai car – More affordable, cheaper
to run, cheaper to replace, allows more customers to own a car, allows people to
spend money on other things.
2.
3.
4.
(c) Australians have different needs and incomes so products of different price and
quality made in different countries are in demand.
The price will go down as more paper rings are available to buy. Other countries (that
do not have a stapler) might stop making paper rings because they cannot make
them as easily and may start making something else that consumers want.
Other countries could have more product differentiation – make their paper rings
bigger or smaller, change the colour or design, make their product seem more
attractive by changing the packaging or logo, and so on.
Some other examples of technology that have improved the way we make and sell
products include the Internet, robotics, computerised design and manufacturing.
Exercise 1.8
Country specialisation
Export product or service
Country
Possible reasons for specialisations
Education
Australia
High quality institutions and location
Electrical consumer
products
Taiwan
Access to skilled labour
Oil
Saudi Arabia
Large quantity of the natural resources
and established wells
Wool
New Zealand
Suitable skills, climate and land area to
farm sheep
Beef
Argentina
Suitable skills, climate and land area to
farm cattle
Tea
Sri Lanka
History in tea production, suitable skills
and climate
Motor vehicles and
transport equipment
America
Innovative designers, automated
production and skilled workers
Clothing and footwear
China
Low cost labour
Global Connections­­—Page 53
Appendix 4—Suggested Answers
Exercise 1.9
Communication tools in my generation
Grandparent’s
Benefits and
Today’s
communication tools problems of old tools communication
tools
Benefits and problems
of new tools
Letters, telegrams
+ longer letters
- slow delivery
Email, SMS
+ fast delivery
- short notes
Black and white
television
+ brought
entertainment to
homes
- poor image,
limited shows
Colour TV, web
+ wide range of
(video stream), video
choice
email
- some content poor
quality
Drive in theatres
+ Cheap entry fees
- poor sound
DVD, on-line movies
+ wide choice,
quality image
- needs regular
equipment
updates
Radio, record player,
cassettes,
+ wide choice for
the period
- poor sound
quality
DVD, MP3 audio,
MP4 videos,
+ wide choice,
quality image
- needs regular
equipment
updates
Fixed line telephone
+ wide urban
coverage, cheaper
call costs
- less flexible than
mobiles
Mobile phones,
PDAs, Blackberries.
+ can contact people
easily
- people can be ‘oncall’ all hours
Blackboard, slate
Whiteboard, Smart
+ cheap
- temporary display Board, laptop,
photocopiers
Personal banking
+ Theft more
difficult
- limited opening
hours, time
consuming
Exercise 1.10
1.
2.
+ fast, 27/7
availability
- theft is easier
Communication technology users
The internet attracted 50 million users fastest (4 years), but radio took the longest
time (38 years) from invention to many users, because people also did not have as
much disposable income in 1920 and there were few radio stations at first.
True.
Exercise 1.13
1.
Online banking,
ATMs, telephone
banking
+ can save and
duplicate
information
- expensive
Global media networks
Global media networks are organisations providing mass communication that reaches
people in many countries. These include television, Internet, films, newspapers,
magazines and radio.
Global Connections—Page 54
Appendix 4—Suggested Answers
Exercise 1.14
People on the move
24.3%
23.9%
22.0%
Born overseas
Travelled overseas
8.4%
in 1982
3.
6.
(c)
in 2006
The percentage of Australians who travelled overseas increased 15.5% between
1982 and 2006.
Saving for the holiday
Preparing for the holiday
• Japanese citizen has
a job in Japan
• Japanese person books
flight with Qantas.
• Even though they are in
Japan the money goes
to an Australian
company. This is an
Australian export.
• earns yen and saves
for a holiday.
Having the holiday
• Japanese tourist arrives in Australia
• Buys accommodation, meals, taxi fares and
visits tourist attractions.
• Buys these things with money earned in Japan.
• These items are Australian exports. because
the are bought by a person from another
country with money from that money
Exercise 1.15
Reasons for Australian short-term overseas trips in 2006
Main reason for trip
Number
Percentage of total
Conference
189,100
3.8%
Business
736,600
14.9%
Visiting friends/relatives
1,244,900
25.2%
Holiday
2,332,700
47.2%
Employment
113,200
2.3%
Education
56,800
1.1%
Other/not stated
Total
267,200
5.4%
4,940,600
100.0%
Global Connections­­—Page 55
Appendix 4—Suggested Answers
Other/not stated
Education
Employment
Holiday
2.
Conferences – hotels, caterers, car hire, tour operators
•
Visiting friends/relatives – transport operators, tour operators, restaurants
•
•
Business – hotels, car hire, taxis, interpreters, business services, personal
services
Holiday – hotels, caterers, car hire, tour operators, transport operators
Employment – landlords, transport services, supermarkets
Education – institutions, landlords, transport services, supermarkets.
Exercise 1.16
Destinations for Australian short-term travellers in 2006
Some benefits and problems that have resulted from faster air travel include
•
•
benefits: more efficient business trips, travel easier and cheaper
problems: diseases can spread quickly, planes are crowded, some popular sites
are becoming polluted.
Exercise 1.17
2.
Visiting
friends/relatives
•
•
1.
Business
Some of the jobs (services) that cater to
•
3.
Conference
Lower travel costs
The percentage of average weekly earnings for a flight to London in 1938 was 5500%
but today it is 155 %. (Working: (440 / 8) x 100 = 5500% and (1615 / 1041.6) x 100 =
155%)
The price of air travel has gone down because there are more passengers, but flights
are also more crowded.
Exercise 1.19
Currencies
Brazil
real
Canada
dollar
Denmark
krone
European Union
euro
Hong Kong
dollar
Indonesia
rupiah
Israel
shekel
Japan
yen
Malaysia
ringgit
Mexico
peso
New Zealand
dollar
Global Connections—Page 56
Philippines
peso
Saudi Arabia
riyal
South Africa
rand
South Korea
won
Taiwan
dollar
Thailand
baht
Turkey
lira
United Kingdom
pound
Venezuela
bolivar
Vietnam
dong
Appendix 4—Suggested Answers
Exercise 1.20 Globalise me
1.
2.
3.
4.
5.
Kelly’s destination is the United States of America and Hawaii (hint: laptop itinerary
and surfboard).
Kelly is travelling to attend a surfing competition (hint: laptop itinerary and
magazine).
Kelly is carrying a computer and a mobile phone.
Kelly’s nationality is Australian (hint: passport).
The initials FTA on Kelly’s newspaper mean ‘Free Trade Agreement’.
Exercise 1.21
Global citizen
Some suggested items:
•
I eat Italian Food
•
I watch cartoons from Japan
•
•
•
•
•
•
I shop online
I listen to Spanish music
I am interested in world events
I watch American TV shows
I am friends with people from different countries
I watch English Soccer.
Exercise 1.22
2.
Cultural exports
Some food products now made in Australia, but once originated in another culture.
•
Curry sauce (India)
•
Chocolate (Mexico)
•
•
•
•
•
•
•
•
Potato (Peru)
Rogan Josh Curry (India)
Soy Sauce (China)
Salami (Italy)
Olives (Turkey/Syria)
Pastries (France/Italy)
Udon Noodles (Japan)
Pasta (Italy).
Exercise 1.23
Global cultural products
3.
i
f
a
s
h
i
o
n
n
d
f
f
l
a
t
o
t
r
o
g
m
o
d
t
i
c
c
a
u
e
s
r
n
r
c
i
s
u
m
s
e
m
a
g
r
i
o
e
t
w
t
i
o
n
o
e
n
s
u
r
p
m
c
s
o
a
p
s
o
r
w
o
h
s
n
o
i
s
i
v
e
l
e
t
Global Connections­­—Page 57
Appendix 4—Suggested Answers
Chapter 2 —Globalisation and Australia
Exercise 2.1
4.
a)
b)
5.
The main change in Australia’s export markets from Federation in 1901 to
1950–1951 was the decline exports to the UK and increase in exports to the
United States and other markets.
The United Kingdom (UK) was our main market because Australia was a British
colony and had a strong trade relationship with the United Kingdom. Wheat,
wool and gold were common exports.
The main changes in Australia’s export markets from 1950–1951 to 2000–2001 were
•
•
•
6.
Australia’s export markets over time
the growth in exports to Japan
the decline in exports to the UK
the growth of trade with more countries – this indicates that Australia no longer
relies only on traditional trade partners and is more insulated from problems in
one market.
(a) China and Japan have become Australia’s major export markets over the last six
years.
(b) Asian markets are now very important as they are developing quickly and need
many goods and services that Australia can provide. Asia also geographically
close, so shipping is not as difficult or expensive as it is to traditional markets.
Exercise 2.2
4.
5.
International trade at your house
Domestic trade involves selling products or services within the country they were
produced, but global trade involves selling products or services to buyers in another
country.
Some reasons why governments help their businesses to export include:
•
Trade helps domestic businesses make more money and creates new jobs.
•
Trade encourages innovation in businesses.
•
•
Trade can give citizens access to a wider variety of goods and services.
Trade increases the wealth of a country.
Exercise 2.3
Trade and income
1.
(a)
True. There is a link between a country’s trade activity and citizens’ income.
2.
A three precent increase is $15, so a $500 wage will become $515.
(b) True. Increased trade activity leads to an even greater increase in citizens’
individual incomes.
Exercise 2.4
Export businesses
1.
There were 42,645 export businesses in Australia in 2006–2007.
3.
Large business exporters were 10% of the total in 2006–2007.
2.
Small business exporters were 39% of the total in 2006–2007.
Global Connections—Page 58
Appendix 4—Suggested Answers
Exercise 2.6
1.
Australia’s goods and services exports in 2007
Total value of primary products (A$million)
Coal
20,753
Iron ore
16,112
Gold
11,555
Crude petroleum
7,966
Aluminium ores
6,058
Natural gas
5,073
Beef
4,488
Copper ores
3,764
Wool
2,746
Zinc ores
2,534
Meat (excluding beef)
2,028
Wheat
1,960
Zinc
1704
Total:
2.
86,741
Total value of services (A$million)
Personal travel (including
tourism)
11,549
Education services and travel
for education
12,864
Professional and business
services
5,743
Passenger transportation
services
4,207
Other transportation services
3,821
Business travel
2,536
Total:
3.
40,720
Total value export manufactures (A$million)
Aluminium
5,888
Medicines
3,540
Copper
3,202
Refined Petroleum
3,183
Alcoholic beverages
(mainly wine)
3,066
Passenger motor vehicles
(such as cars)
2,902
Total:
21,781
4.
Percentage of primary products
86,741/149,242 x 100
=58.1%
5
Percentage of services in top 25 exports
6.
Percentage of manufactures in top 25 exports
40,720/149,242 x 100
=27.3%
21,781/149,242 x 100
=14.6%
Global Connections­­—Page 59
Appendix 4—Suggested Answers
Exercise 2.7
1.
Australia’s goods and services imports in 2007
Total value of primary products imports (A$million)
Crude petroleum
Gold
14,648
6,128
Total:
20,776
2.
Total value of service imports (A$million)
Personal travel
(including tourism)
Freight transportation
Passenger transportation
13,497
8,161
6,658
Royalties and licence fees
3,518
Professional and
business services
3,413
Business travel
2,667
Total:
37,914
3.
Total value of imports that are manufactures (A$million)
Passenger motor vehicles
Refined petroleum
13,849
8,235
Computers
6,904
Medicines
6,437
Telecommunications
equipment
6,125
Motor vehicles for
transporting goods
5,722
Civil engineering equipment
Aircraft and parts
3,451
2,990
Motor vehicle parts
2,573
Measuring and controlling
instruments
2,521
Furniture
2,435
Other electrical machinery
2,350
Toys, games and
sporting goods
2,182
Computer parts
2,167
Televisions
2,156
Pumps for gas
Paper and paperboard
Total:
Global Connections—Page 60
2109
2,094
74,300
Appendix 4—Suggested Answers
4.
Possible reasons for both the import and export of cars include
•
•
•
•
5.
Australia imports cars with special features, such as, luxury cars from Germany
or fuel-efficient cars from Japan.
Some imported cars are cheaper or smaller than cars made in Australia.
People overseas, such as Saudi Arabia, prefer larger Australian cars because of
features such as power or size.
Australia exports to countries that do not manufacture cars, such as the Pacific
Islands.
The following items are common business inputs.
Crude petroleum; freight transportation; computers; telecommunications
equipment; gold; motor vehicles for transporting goods; professional and
business services; aircraft and parts; royalties and licence fees; civil engineering
equipment; business travel; motor vehicle parts; measuring and controlling
instruments; computer parts; other electrical machinery; pumps for gas;
paper and paperboard; and passenger motor vehicles.
Household consumers also buy some of these imports, such as like computers.
Exercise 2.8
1.
Possible products and services include
•
Rural goods: beef, wheat, wool, meat
•
Resources: coal, iron ore, natural gas, copper
•
•
2.
•
Services: personal travel, education services, professional business services
Manufactures: passenger motor vehicles (cars), medicines
Other goods: wine, sugar.
Some reasons why the value of Australia’s exports has risen and fallen over the past
13 years are
•
•
•
•
•
•
•
3.
Exports by sector in 2007
the Australian dollar value can affect the level of exports, so when the dollar
value is high, exports become more expensive and overseas consumers buy
fewer Australian goods and services
the SARS outbreak in Asia in 2002 reduced the number of tourists wanting to
travel, so there were fewer service exports
the Sydney Olympics boosted services exports in 2000, especially tourism,
and the media coverage about Australia made other Australian exports more
popular
trade agreements made Australian exports more attractive to some countries
as developing countries, like China grow, they buy more resources exports
the drought affected rural goods, so Australian farms produced fewer goods for
export
if businesses overseas produce goods cheaper or better than Australian
businesses, then exports of that product will fall.
The type of event could improve export earnings in each sector include
General
•
weak Australian dollar – our goods and services are cheaper so people overseas
may buy more
Services
•
a large international event, like Soccer World Cup, could attract many visitors.
•
winning a new resources contract from a developing country, such as China
•
a major, new invention may sell quickly, such as drugs to prevent some cancers
•
a major crop failure overseas may increase demand for Australian products, such
as wheat.
Resources
Manufactures
Rural
Global Connections­­—Page 61
Appendix 4—Suggested Answers
5.
Exports grouped under different headings for different audiences
Rural exports
Mineral/fuel exports
beef
coal
wheat
iron ore
wool
crude petroleum
meat
aluminium ores
milk and cream
natural gas
cotton
copper ores
barley
nickel ores
woodchips
refined petroleum
animal feed
uranium
crustaceans
crude minerals
cheese and curd
stone
cereal preparations
sand and gravel
raw hides and skins
precious metal ores
fruit and nuts
natural abrasives
Exercise 2.9
Export celebrity heads
Examples of questions:
•
Am I a primary product?
•
Am I a manufacture?
•
•
•
Am I a service?
Am I edible?
Am I an animal product?
Chapter 3—Globalisation Drivers
Exercise 3.1
Trade in history activity
Period in time
Goods traded
Transport used
Distances
travelled
Global or local
trade
Before Christ
(Before
Common Era)
Food, animals,
spices, wine,
cloth, precious
metals
Foot, horse,
canoe, small
sailboat
Usually short
distances
Local trade
Renaissance
Precious metals,
Ocean going
tobacco, ivory, art, sailing ships,
spices, silk
horse.
Trade between
countries and
rare travel to
other continents
Local trade for
everyday goods
and some
global trade in
luxuries
19th Century
Metals, early
Steam ships,
machines, timber, trains, horse
coal, cloth, furs
All continents
now involved in
overseas trade in
many items
Increasing
global trade
in luxury and
non-luxury
goods
20th Century
Metals, fuel,
ores, cars, wheat,
wool, chemicals,
computers, fruit,
wine, televisions
Large scale
global trade to
and from almost
every country
Global trade
in goods of all
types as well as
local trade
Global Connections—Page 62
Container ships,
aircraft, cars/
trucks, trains
Appendix 4—Suggested Answers
2.
If you live on an island in the Pacific Ocean that has never had contact with other
countries, you might not have
•
tomatoes
•
rice
•
•
•
•
•
•
Exercise 3.2
spices (most)
books in other languages
international tourists
wool
milk
metal knives.
Role play
Encourage students to creatively alter the lines in the role play to reflect the different time
periods.
Exercise 3.3
2.
Globalisation drivers activity
Many of the motivations for globalisation are similar to motivations 100 or even 300
years ago. New technologies are allowing us to reach those goals faster and cheaper.
Exercise 3.4
Exporting made easier
Export problems in the past
Export problems overcome today by
Distance to traditional
markets
Planes and transport vehicles
Food products spoilt
Refrigeration
Trade barriers (tariffs, quotas)
Trade agreements
Product does not suit all
countries
Country selected to suit product or product changed to suit
each country’s needs (such as, car steering wheel side)
Communication by sea mail,
telegraph
Modern communication: Internet, phones and fax
Consumer goods too
expensive
Mass production lowers prices and cheaper goods can now
be imported
Export costs too high for small Cheaper, faster transport can carry smaller loads in
businesses
containers and trade agreements lower tariff barriers
Exercise 3.5
Trade protection in history
Some points to consider:
1.
2.
3.
Tariffs made products coming from outside of Victoria more expensive for consumers.
Victorian products seemed cheaper, but sometimes producers charged higher prices
to make a greater profit. Consumers usually paid higher prices when there were tariffs
or had little choice. Interstate producers often did not try to sell in that market with
tariffs added to their prices.
If local producers did not have the protection of the tariffs, they would need to produce
better or cheaper goods to compete against foreign products. (They would need to
increase their productivity.)
Tariffs were not fair to all workers, as interstate workers had little or no chance to
compete interstate or in foreign markets. Tariffs did not encourage invention of new
products. Tariffs were not fair to consumers as they paid higher prices and had less
choice
Global Connections­­—Page 63
Appendix 4—Suggested Answers
Exercise 3.6
1.
Trade agreements
The final sale price of 1000 units for each country is
Country
Tariff
1000 units + tariff
New Zealand
0%
$2500
22%
$3050
United States
5%
$2625
Saudi Arabia
29%
$3225
India
33%
$3325
Malaysia
Thailand
10%
$2750
Ireland
40%
$3500
Example of Malaysia calculation:
•
Cost for 1000 units = 2500 ($2.50 x 1000)
•
Total = $3050 (cost for 1000 units + tariff)
•
2.
Tariffs = $550 ($2500 x 0.22)
High tariffs will increase Gobbledgooks’ sale prices – hard to compete with locally
made products. For Gobbledegooks to remain competitive it must cut production costs
or sell at higher prices based on product quality or features. It could also advertise to
give the product brand status.
Exercise 3.7
1.
2.
Subsidies
Subsidies encourage overproduction in developed countries, such as the USA and
Europe. Subsidies are grants to farmers so that they can sell a kilo of sugar or litre of
milk cheaper than farmers who do not have this grant. Farmers can then sell their
surplus products below the real production cost, making world prices lower. As a
result, farmers in countries with no subsidies, such as in Africa, cannot find buyers in
world markets. Subsidies hurt their local economies.
(a) The WTO is the international body that deals with the rules of trade between
countries. Visit www.wto.org for the most recent list of its 151 member
countries.
(b) The Organisation for Economic Co-operation and Development (OECD) helps
governments to solve the economic, social and governance challenges of a
globalised economy. Its members are
Australia, Belgium, Czech Republic, Finland, Germany, Hungary, Ireland, Japan,
Luxembourg, Netherlands, Norway, Portugal, Spain, United Kingdom, Austria,
Canada, Switzerland, Denmark, France, Greece, Iceland, Italy, Korea, Mexico, New
Zealand, Poland, Slovak Republic, Sweden, Turkey, United States.
(c) The Asia Pacific Economic Cooperation (APEC) was established in 1989 to
promote open trade and economic cooperation between Asia-Pacific economies.
Its members are:
Australia, Brunei Darussalam, Canada, Chile, People’s Republic of China,
Hong Kong, China, Indonesia, Japan, Korea, Malaysia, Mexico, New Zealand,
Papua New Guinea, Peru, Philippines, Russia, Singapore, Chinese Taipei,
Thailand, United States, Vietman.
Global Connections—Page 64
Appendix 4—Suggested Answers
Exercise 3.8
Education levels
University degree
courses
Certificate, diploma,
traineeships, apprenticeship
courses (TAFE)
No formal qualifications
necessary (on-the-job training)
engineer
beautician
fire fighter
fashion designer
plumber
sales assistant
medical scientist
hairdresser
waiter
teacher
painter
picture framer
graphic designer
computer repairs
florist
doctor
personal trainer
exporter
physiotherapist
cabinet maker
courier driver
Chapter 4—Global Responsibilities
Exercise 4.2
1.
Many East Asian countries have reduced poverty because they have
•
reduced their trade barriers through trade agreements
•
attracted overseas investment
•
•
•
•
•
2.
3.
Reducing Poverty
•
encouraged business involvement in trade
gained more political stability
improved governance (for example by reducing corruption)
lowered inflation
increased access to education
increased productivity.
Poverty has increased in some countries because they have problems with governance,
lawlessness, have many trade barriers, few businesses producing goods and services
of export quality and poor trade infrastructure (roads, wharves, financial systems) to
help business that want to export.
Poverty can be reduced in developing countries by
(a) international organisations – aid to establish productive businesses, provide
business advisors, sponsor training
(b) developed countries – reduce trade barriers on developing countries’ products,
help to restore law and order, provide micro loans to businesses, provide business
advisors, sponsor training
(c) developing countries – reduce trade barriers against other developing countries’
products, get rid of corruption, provide education
(d) private businesses–provide micro loans to businesses, provide business
advisors, sponsor training, set up factories to produce their goods (provides jobs
and training).
Global Connections­­—Page 65
Appendix 4—Suggested Answers
4.
(a)
These regions could increase their share of exports by taking step described in
the answer for exercise 4.2, part 1.
(b) Find detailed answers on the Internet. A very brief description is
• AusAid: Australian Government aid agency that provides development
and emergency aid. Australian taxpayers and workers support this agency.
• Care Australia: private Australian aid organisation that provides
emergency aid. Australian donations and workers support this agency.
• World Vision: private Australian aid organisation that provides emergency
aid. Australian donations and workers support this agency.
• Grameen Foundation: private organisation founded in Bangladesh that
provides micro loans to women in 27 developing countries to begin small
businesses. Australians make no major contribution.
• United Nations (UN): global organisation that maintains international
peace and security; develops friendly relations among nations; cooperates
in solving international economic, social, cultural and humanitarian
problems and promotes respect for human rights and fundamental
freedoms. Developing countries receive most of these benefits and
Australia is a member of the UN.
• Oxfam: private aid organisation that provides emergency aid and
development. Australian donations and workers support this agency.
(c) Consider the following issues in the debate on the topic: trade is better than aid
for poor countries.
• Aid is a short-term solution but does not fix the long term problem.
(Explain the meaning of the saying, “Give a man a fish and he will eat for a
day. Teach him how to fish and he will eat for a lifetime.”
• Trade helps develops the skills of people and communities and can help
more people than aid.
• Some amount of aid is necessary but it should focus on building skills in
developing countries.
• Some aid is necessary because the needs of poor people are urgent (for
example immunisations or during droughts, floods, civil war).
Exercise 4.3
(a)
Case study – code of conduct
The importance of these headings will change depending on the company and their
goals. Some items cannot be overlooked such as legal obligations but all are important
for having an ethical business.
(b) Honest Joe could include price regulation in its code of conduct.
Global Connections—Page 66
Global Connections