2.2.2 International trade

Advantages and disadvantages of free trade, including:

• lower prices and increased choice for consumers
• lower input costs
• wider markets for businesses
• foreign competition harming domestic businesses
• increasing unemployment.

Reasons for protection:

• prevent dumping
• protect employment
• protecting infant industries
• to gain tariff revenue
• protect consumers from unsafe products
• reducing current account deficits
• retaliation.

Methods of protection:

• tariffs
• quotas
• subsidies
• advantages and disadvantages of each method of protection
• supply and demand diagrams to show tariffs, quotas and subsidies.

Modern trading blocs:

• impact of trading blocs on member and non-member countries
• examples of trading blocs.

Role of the World Trade Organization (WTO):

• actions by the WTO.

Trade patterns of developed and developing countries.