Trade ChoicesYou have $1,000 to spend and your alternatives are:

• Purchase 1 U.S.-made television and 1 U.S.-made bicycle.or• Purchase 1 Chinese-made television, 1 Korean-made bicycle

and 2 cases of French wine.or• Purchase $1,000 of stock in a Canadian company.

Which do you choose?

Voluntary Trade

Creates Wealth

Example 1

Example 1

Win - Win

Win – Win ?

Win – Win ??

Win – Win ???

Apples and Oranges

• Apple price $.70/lb• Orange Price $.70/lb

• Washington Grower• 20 acres yields• Apples 50 bu/acre• Oranges 1bu/acre

• Florida Grower• 20 acres yields• Apples 2bu/acre• Oranges 40 bu/acre

Trade & Comparative Advantage – Example

Rank Country Exports Imports Total Trade

% of Total Trade

--- Total, All Countries

665.2 948.2 1,613.4 100.0%

1 Canada 127.0 141.0 268.0 16.6%2 China 49.3 174.5 223.8 13.9%3 Mexico 98.3 119.0 217.2 13.5%4 Japan 27.7 55.3 82.9 5.1%5 Germany 21.1 50.2 71.3 4.4%6 Korea, South 18.8 27.9 46.7 2.9%7 United Kingdom 21.3 22.4 43.7 2.7%8 France 13.1 19.7 32.8 2.0%9 Saudi Arabia 7.2 24.4 31.6 2.0%

10 Brazil 17.7 11.2 29.0 1.8%

Top 10 U.S. Trade Partners, Total Trade, Year to Date (May, 2014)

US$, bn, unrevised

http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

Rank Country Imports % of Total

Imports--- Total, Top 15

Countries726.5 76.6%

1 China 174.5 18.4%

2 Canada 141.0 14.9%

3 Mexico 119.0 12.5%

4 Japan 55.3 5.8%

5 Germany 50.2 5.3%

6 Korea, South 27.9 2.9%

7 Saudi Arabia 24.4 2.6%

8 U.K 22.4 2.4%

9 France 19.7 2.1%

10 India 19.2 2.0%

Country Exports % of Total

ExportsTotal, Top 15 Countries

477.5 71.8%

Canada 127.0 19.1%

Mexico 98.3 14.8%

China 49.3 7.4%

Japan 27.7 4.2%

U.K. 21.3 3.2%

Germany 21.1 3.2%

Korea, South 18.8 2.8%

Netherlands 17.9 2.7%

Brazil 17.7 2.7%

Hong Kong 16.8 2.5%

U.S. Trade, Imports & Exports, Year to Date (May, 2014)

US$, bn, unrevised

http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

Rank Country Surplus1 Hong Kong 14.52 Netherlands 8.83 United Arab

Emirates7.6

4 Australia 6.75 Brazil 6.56 Singapore 6.17 Belgium 5.38 Panama 4.29 Argentina 2.7

10 Egypt 2.6

Rank Country Deficit1 China -28.82 Germany -6.63 Japan -5.14 Mexico -4.35 Canada -2.86 Korea, South -2.77 Saudi Arabia -2.78 India -2.49 Ireland -2.1

10 Italy -2.1

U.S. Trade Surplus & Deficit, Year to Date (May, 2014)

US$, bn, unrevised

http://www.census.gov/foreign-trade/statistics/highlights/top/top1405yr.html

http://www.census.gov/foreign-trade/data/index.html

Balance of Payments

Example

The Data

The Data

The Balances

Trade Deficit

International Comparisons of Hourly Compensation Costs in Manufacturing