Global Connections - murrayville - homemurrayville.wikispaces.com/file/view/EFF_Global_Connections[1].pdf · Global Connections—Page iii Introduction The Australian Government Exporting

Global Connections

Global Connections —Page 1

Global Connections

Teaching Resources

© 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/

BookWriter: Mary MurphyContributors: Leigh Derigo, Kate Conroy, Kelly WilsonEditors: Leigh Derigo, Lauren Black, Jackson RoweIllustrators: Allan Geddes and Ed RadclyffeDesigner: Bytes ‘n Colours

Animated cartoonAnimator: Allan Geddes Script: Patricia O’ConnellAudio: Patricia O’Connell, Lauren BlackEditors: 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.

Global Connections —Page i

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21Part A Australia’s Patterns of Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 A brief history of Australia’s trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Exercise 2.1 Australia’s export markets over time . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23Part 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

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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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33Part A Trade in History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Exercise 3.1 Trade in history activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Exercise 3.2 Role play . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35Part B Globalisation Drivers Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36 Exercise 3.3 Demand drives globalisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 Exercise 3.4 Exporting made easier . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40Part 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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43Part A Country Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43 Exercise 4.1 Least developed countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Trade reduces poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44 Exercise 4.2 Reducing poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44Part 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 iii

IntroductionThe 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

• 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

• 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

• 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 iv

Globalisation Animated CartoonIn 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

• 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.


Chapter 1—Globalisation Means…………

Chapter 1 —Globalisation Means…………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 trade

• Imports and exports• Trade with many countries• Trade agreements help exporters• More demand for goods and

services as living standards improve

• Lower business costs

Global culture

• Products from many countries

• Cultural exchange and understanding

• Cultural exports• Global advertising• Global organisations

Global communication

• Cheaper, faster communication• Internet access• Global media networks• New technologies• Increased awareness of

international issues

Global migration

• People moving to other countries• People working overseas• International tourism• Cheaper flights and transport

trad

ecom

munication

migrationculture

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 2


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

List the links Australia has with the following countries. New Zealand has been started for you.

Country Connection to AustraliaNew Zealand Sport, tourism, ANZAC tradition and the Closer

Economic Agreement (CER)IndonesiaUSAU.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. Name five local community organisations/groups and explain what they do for your community. Look in your local newspapers for ideas.

2. 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 What the group does for the global communityUnited Nations (UN)International Red CrossWorld Trade Organization (WTO)Medecin Sans FrontieresThe World Bank

3. Complete this paragraph:

Australia has many links with the international community. These links are important to Australia because…

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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 Story starter1. What is the meaning of the phrase ‘a global marketplace’?2. On a map of the world locate and label the countries mentioned in the story.3. 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.



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.

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Find the following goods in your classroom and list where they were made.

Goods Country made in Goods Country made inshoes shirt or jumper scissors Pencil casewatch computerexercise book library book lunchbox whiteboard

markers

Both exports and imports are important for the global community.

• 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 non-exporting 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.



Exercise 1 .5 Australian exports and imports – an introduction

Study the table of Australia’s top five exports and imports for 2007.

1. Sort Australia’s top five exports and imports into two columns: ‘goods’ and ‘services’.

2. Give one reason why coal was a top export in 2007.3. Give one reason why tourism was a main service export in 2007. 4. 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 2007Coal Crude petroleum Iron ore Motor vehicles Education Personal travelGold Refined petrolTourism Freight transportation services

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.

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 Alpha Beta Gamma Deltascissors 1 3 2 4sheets of used A4 paper 20 10 14 16rolls of sticky tape 1 1 2 1rulers 1 2 1 2pens or pencils 1 2 1 1

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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.

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Exercise 1 .7 The Circle Makers – extension1. 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.

2. 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?

3. If the ‘country’ with the stapler can make paper rings cheaper, explain what the other ‘countries’ could do to keep selling their product.

4. 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.

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Exercise 1 .8 Specialisation1. 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.

2. Consider some possible reasons for this specialisation, such as good climate or large work force.

Export product or service Country Possible reasons for specialisationEducation Australia Skilled teachers, quality

institutions, close to AsiaElectrical consumer productsOilWoolBeefTeaMotor vehicles Clothing and footwear

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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.

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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.

Grandparent’s communication tools

Benefits and problems of old tools

Today’s communication tools

Benefits and problems of new tools

Letters, telegrams Black and white television Drive in theatresRadio, 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.



Exercise 1 .10 Communication technology users

Study Graph 1.1 and answer the following questions.

1. Which technologies reached 50 million users in a short number of years?2. True or false? People started using (adopted) the Internet four times more

quickly than computers.3. 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)

38

1613

4

0

5

10

15

20

25

30

35

40

Radio PersonalComputers

Television Internet

Year

s

Source: Economist

Exercise 1 .11 Communications – interpretation 1. 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.

or2. 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.

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Exercise 1 .13 Global media networks

We receive some of our news and entertainment via global media networks.

1. As a class define ‘global media network’.2. 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.)

3. (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.

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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 People on the move1. Prepare a column chart from the table.

Percentage of Australians in 1982 in 2006Who were born overseas 22.0% 24.3%Who travelled overseas 8.4% 23.9%

Source: Australian Bureau of Statistics (ABS)

2. 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).

3. 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%.

4. 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.

5. 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).

6. 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.)

7. 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.)Exer

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Exercise 1 .15 Reasons for Australian short-term overseas trips in 2006

Main reason for trip Number Percentage of totalConvention/conference 189,100Business 736,600Visiting friends/relatives 1,244,900Holiday 2,332,700Employment 113,200Education 56,800Other/not stated 267,200Total 4,940,600

Source: Australian Bureau of Statistics (ABS)

1. 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.

2. List some of the jobs (services) that cater to each type of traveller.

Exercise 1 .16 Destinations for Australian short-term travellers in 20061. 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.

2. 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.

3. 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 Destination1 New Zealand2 United States of America3 United Kingdom4 Thailand5 China6 Fiji7 Hong Kong8 Indonesia9 Malaysia10 Vietnam

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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.

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 Lower travel costs1. Calculate the percentage of average weekly earnings that people would pay

for a flight to London in(a) 1938(b) today.

2. List reasons for this change in air travel costs.3. 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

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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.

Exercise 1 .18 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 rateUS dollar US$euro €Japanese yen ¥British pound £Swiss franc CHFChinese yuan

Indian rupee Thai baht

South Korean won

Exercise 1 .19 Currencies1. Match the currency to the country

Brazil bolivarCanada kroneDenmark bahtEuropean Union dollarHong Kong riyal Indonesia wonIsrael randJapan dollarMalaysia pesoMexico dollarNew Zealand dongPhilippines ringgitSaudi Arabia yenSouth Africa shekelSouth Korea rupiahTaiwan euro Thailand poundTurkey liraUnited Kingdom dollarVenezuelan realVietnam peso

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sNot 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.

2. 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.



Exercise 1 .20 Globalise me

Meet Kelly, who is a global citizen. Colour the picture and answer the questions below.

1. What is Kelly’s destination? 2. Why is she travelling? 3. Name two communication technologies that Kelly is carrying.4. What is Kelly’s nationality?5. What do the initials FTA mean on Kelly’s newspaper?

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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.

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I am a global citizen because...



Part D Global Culture

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 Cultural exports1. 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.

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Exercise 1 .23 Global cultural products1. Draw a table like the one below and add seven more global culture

examples.2. 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 Number of users Sushi JapanGolf ScotlandRap music United States of America

3. Circle words from the list of cultural products hidden in the ‘word find’. The words may flow in any direction.

r f i b f a s h i o n c k o aj u h n d v x s t z w a q l xg v s x d f t t r d i r o w jw f a o p i e o d w x t g i ft y c u f l g i u o p o a n sd f t o g m h e j r k o l e zx c o v b s n m n l i n q a zw d r c i s u m s o x s e d ct r s e m a g r e t u p m o cr f v t g b y h n u j s m i ko o l p a l s k d j f h a f wp q t k x j o p d s v b r r os w o h s n o i s i v e l e t

actors cartoons computer gamesfashion films foodindigenous art music sporttelevision shows tourism wine

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Exercise 1 .24 Global brands1. 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 Number of users Nokia McDonaldsToyota Nintendo Sony

Australian Brands Number of usersHarvey Norman Haigh’s Chocolates Forty WinksANZ BankQantas

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.

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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.


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.



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.



Exercise 2 .1 Australia’s export markets over time1. (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.

2. Describe the main changes in Australia’s export markets from 1950–1951 to 2000–2001.

3. (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

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a) Australia’s export markets in 1901 b) Australia’s export markets in 1950–1951

c) Australia’s export markets in 2000–2001 d) Australia’s export markets in 2006

Source: Direction of Trade Series 2000–2001 and Trade at a Glance 2007, DFAT

United Kingdom50%

Belgium/Lux3%

New Zealand3%

France5%

USA7%

Sri Lanka6%

Germany5%

Other9%

South Africa12%

United Kingdom33%

USA15%

Japan6%

Italy5%

Belgium/Lux5%

France9%

Germany3%

Egypt2%

Other22%

Japan19%

U.S.A10%

Korea8%

New Zealand6%

China6%

Taiwan5%

Singapore5%

Other37%

United Kingdom4%

China17%

United States11%

United Kingdom9%

New Zealand8%

India7%

Singapore5%

Japan24%

Indonesia4%

Taiwan5%

Republic of Korea10%



Part B Australian Industry and Business

Australians buy many things produced by overseas businesses (imported goods) and sell many things overseas made by Australian businesses (exported goods).

Exercise 2 .2 International trade at your house 1. Investigate the range of Australian made and imported goods in your house.

Fill in the table with your results.

Room of my house Goods made in Australia Goods made overseas

a) item b) country

Living rooma) b)a) b)a) b)

Kitchen a) b)a) b)a) b)

My bedroom a) b)a) b)

Garage, shed, storeroom or hall cupboard.

a) b)a) b)

2. 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?

3. On a world map (Appendix 1), colour in the countries where your imported goods were made and draw arrows from those countries to Australia.

4. Explain the difference between domestic trade and global trade.5. Discuss at least two reasons why governments might help businesses to

trade.

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Exercise 2 .3 Trade and income

1. 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. 2. Calculate how much a three per cent increase is (in dollars) for a person

earning $500 per week.

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.

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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.

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 Export businesses1. How many export businesses were there in Australia in 2006–2007?2. Calculate the percentage of small business exporters in 2006–2007?3. 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

Medium,21665

Small,16555

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.

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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.

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.

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. 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).2. On a map (Appendix 1), show the flow of any production parts and the global

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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.



Exercise 2 .6 Australian goods and services exports1. List the exports that are primary products in Table 2.1. What is their total

value?2. List the exports that are services in Table 2.1. What is their total value?3. List the exports that are manufactures in Table 2.1. What is their total value?4. 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.)

5. Calculate the percentage of services in this list of top 25 exports. 6. Calculate the percentage of manufactures in this list of top 25 exports.

Table 2 .1 Australian goods and services exports in 2007

Rank A$million1 Coal 20,7532 Iron ore 16,1123 Education services and travel for education 12,8644 Gold 11,5555 Personal travel including tourism 11,5496 Crude petroleum 7,9667 Aluminium ores (including alumina) 6,0588 Aluminium 5,8889 Professional, technical and business services 5,74310 Natural gas 5,07311 Beef 4,48812 Passenger transportation services 4,20713 Other transportation services 3,82114 Copper ores 3,76415 Medicines (human and veterinary) 3,54016 Copper 3,20217 Refined petroleum 3,18318 Alcoholic beverages (mainly wine) 3,06619 Passenger motor vehicles (such as cars) 2,90220 Wool 2,74621 Business travel 2,53622 Zinc ores and concentrates 2,53423 Meat (excluding beef) 2,02824 Wheat 1,96025 Zinc 1,704

Total value of these top 25 exports 149,242Total value of all exports in 2007 216,253

Source: DFAT

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Exercise 2 .7 Australian goods and services imports1. List the imports that are primary products in Table 2.2. What is their total

value?2. List the imports that are services in Table 2.2. What is their total value?3. List the imports that are manufactures in Table 2.2. What is their total value?4. Discuss possible reasons why Australian businesses both export and import

cars?5. Which imports would be used a lot by businesses (as business inputs) to help

produce goods and services?6. 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 Australian goods and services imports in 2007

Rank A$million1 Crude petroleum 14,6482 Passenger motor vehicles 13,8493 Personal travel including tourism 13,4974 Refined petroleum 8,2355 Freight services 8,1616 Computers 6,9047 Passenger transportation services 6,6588 Medicines (human and veterinary) 6,4379 Gold 6,12810 Telecommunications equipment 6,12511 Motor vehicles for transporting goods 5,72212 Royalties and licence fees 3,51813 Civil engineering equipment 3,45114 Professional and business services 3,41315 Aircraft and parts 2,99016 Business travel 2,66717 Motor vehicle parts 2,57318 Measuring and controlling instruments 2,52119 Furniture 2,43520 Other electrical machinery 2,35021 Toys, games and sporting goods 2,18222 Computer parts 2,16723 Televisions 2,15624 Pumps for gas 2,10925 Paper and paperboard 2,094

Total value of these top 25 imports 132,990Total value of all imports in 2007 234,083

Source: DFAT

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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 Exports by sector1. Give an example of a product or service from each sector in Figure 2.3 or 2.4.2. 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.

3. Take one broad export category, such as services, and predict what type of event could improve export earnings.

4. 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.

Beef

coalwheat

crude petroleumwool

aluminium ores

natural gas

milk and cream

cotton

meat

barley refin

ed p

etro

leum

wood chips

copper ores

nickel ores

animal feedcrustaceans

cheese and curd

raw hides and skins

uranium

iron ore

fruit and nuts

crude minerals

stonesand and gravel

cereal preparations

precious metal ores

natural abrasives

Figure 2 .3 Exports of goods and services by sector 2007

Resources34%

Services22%

Rural11%

Manufactures21%

Other goods7%

Gold5%

Source: DFAT Note: Primary products include rural and resources sectors.

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Figure 2 .4 Exports by sector over time 1993–2006

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

19931994

19951996

19971998

19992000

20012002

20032004

20052006

Perc

enta

ge o

f Tot

al Ex

port

s

Rural goodsServicesResourcesManufacturesOther goods

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 TimberCheese FishWine CoalTourism SteelBeef FurnitureCars WheatFruit juice PetroleumToys Computer partsCotton HoneyLobsters Chocolate Glass PearlsGold EducationOpals FilmsSugar Solar cellsFreight services Milk

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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.



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.

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 Trade in history activity1. Draw and complete the following trade in history table

Period in time Goods traded Transport used Distances travelled

Global or local trade?

Before Christ (or Before Common Era)

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 fish books in other languagesspices wool some kind of transport tourists rice coconutsgames metal knives milk

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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: Thank you for meeting with me, kind sir. I read in the newspaper that you have wool to sell.

John: That I do. Would you like to buy some of my wool?Melissa: Yes, I would like to buy five bales of wool. Can you deliver it to my

factory?John: With pleasure. My men and I will bring it by horse and cart to your

factory tomorrow.Melissa: 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. List inventions that might have made it easier to trade in 1960 such as telephones, faster mail delivery and modern banks.

2. Prepare a script and act out the conversation between John and Melissa in 1960.

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.

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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 Demand drives globalisation 1. 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.

2. 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

Satellites • wanting to communicate faster to distant places• wanting to predict the weather• wanting quick access to world news/events

Refrigerated shipping containers

• maintaining food quality over shipping distances• wanting to access new markets• wanting different types of food

Bio technology • improving people’s health• wanting more efficient food production

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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 marketsFood products spoiltTrade barriers (tariffs, quotas)Product doesn’t suit all countriesCommunication by sea mail, telegraphConsumer goods too expensiveExport 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.

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.

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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.

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. Discuss the effect of these tariffs on food prices and other consumer goods.2. Discuss the effects that protection from wider competition would have on

workers’ skills and productivity (the amount they produce).3. Discuss whether tariffs were fair to workers and customers.4. Select a spokesperson to present your group’s ideas to the rest of the class.

remove to promoteTradeagreements

Tradebarriers

Tradeliberalisation

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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 Tariff Unit cost plus tariffNew Zealand 0%Malaysia 22%United States 5%Saudi Arabia 29%India 33%Thailand 10%Ireland 40%

2. 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.

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Exercise 3 .7 Subsidies1. 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.

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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.

cabinet maker

picture framerwaiter

hairdresserexporter

courier driver

painter

graphic designer

computer technician

medical scientist

physiotherapist

teacher

plumber

doctor

web designer

fashion designer

personal trainer

sales assistant

(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.

University degree courses

Certificate and diploma courses, traineeships and apprenticeships (TAFE)

On-the-job training (no formal qualifications necessary)

Engineer beautician 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 Globalisation drivers 1. Discuss and list the positive and negative effects of the globalisation drivers:

technology, demand, trade liberalisation policies, business practices and education.

2. Show the consequences of these drivers in a diagram, for example,

businesses create new jobs

Demand encourages invention of new goods and services

people develop businesses to produce the inventions Exer

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Exercise 3 .10 Global trade gameEx

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Chapter 4—Global Responsibilities

Chapter 4—Global ResponsibilitiesCountries 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/the-world-factbook/index.html and www.dfat.gov.au/geo/fs/)Ex

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1. Afghanistan 17. Equatorial Guinea 33. Mozambique 2. Angola 18. Eritrea 34. Nepal 3. Bangladesh 19. Ethiopia 35. Niger 4. Benin 20. The Gambia 36. Rwanda 5. Bhutan 21. Guinea 37. Samoa 6. Burkina Faso 22. Guinea-Bissau 38. Sao Tome and Principe 7. Burma 23. Haiti 39. Senegal 8. Burundi 24. Kiribati 40. Sierra Leone 9. Cambodia 25. Laos 41. Solomon Islands 10. Cape Verde 26. Lesotho 42. Somalia 11. Central African Republic 27. Liberia 43. Sudan 12. Chad 28. Madagascar 44. Togo 13. Comoros 29. Malawi 45. Tuvalu 14. Congo, Democratic Republic of 30. Maldives 46. Uganda 15. Djibouti 31. Mali 47. Tanzania 16. East Timor 32. Mauritania 48. Vanuatu 49. Yemen 50. Zambia



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)

0

10

20

30

40

50

60

70

80

90

100

1990

LaosVietnam

CambodiaIndonesia

China

PNGPhilippines

Thailand

Malaysia

2007

perc

enta

ge

Source: World Bank 2007

Exercise 4 .2 Reducing poverty 1. List some of the reasons why most East Asian countries in Graph 4.1. have

reduced poverty.2. Discuss some of the possible reasons why poverty has increased recently in

countries such as PNG.3. 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.

4. “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.Ex

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(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.

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.

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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. In groups discuss whether all of these headings are equally important.2. Are there any other items that ‘Honest Joe’ should include in its code of

conduct? 3. 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.

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Appendix 1—World Map

Appendix 1—World Map


Appendix 2—Photocopy Master – Circle Maker Money

Appendix 2—Photocopy Master

Circle Maker Money

$10 $10

$10 $10

$5 $5

$5 $5

$1 $1


Appendix 3—Glossary


Term ExplanationAgricultural 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 businessBusiness Ethics The moral choices made by people in their business relationshipsCommodities Any articles exchanged but usually used to refer to raw materialsCommunication The mechanical or electronic ways of sending informationComparative 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 prohibitedEthics 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 tradeFree 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.



Goods Things that people produce – products that can be touchedGross 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).


Appendix 4—Suggested Answers


Chapter 1 Globalisation Means

Exercise 1 .1 Australia’s links

Country Connection to AustraliaNew Zealand Sport, tourism, ANZAC tradition, source of migrants and the Closer

Economic Agreement(CER)Indonesia Trade, tourism (Bali), aid programUSA 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 Community groups – local and global1. 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 communityUnited 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.



Exercise 1 .3 Story starter1. The term ‘global marketplace’ refers to the combining of once separate and distinct

national markets into one huge worldwide market.2. The countries referred to include Italy, Singapore, China, United States of America,

Taiwan, New Zealand, Thailand and Belgium.3. 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 introduction1. Goods Services Coal Tourism Iron ore Education Gold Personal travel Crude petroleum Freight transportation services Motor vehicles Refined petrol2. Coal was Australia’s top export in 2007 because China is growing rapidly and is buying

large amounts of coal.3. 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.

4. Used mostly by business Used mostly by consumers Crude petroleum Motor vehicles (used by both) Freight transportation services Personal travel Refined petrol Refined petrol (used by both)

Exercise 1 .6 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.



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 The Circle Makers – extension 1. (a) 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.

(c) Australians have different needs and incomes so products of different price and quality made in different countries are in demand.

2. 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.

3. 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.

4. 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 specialisationsEducation Australia High quality institutions and locationElectrical 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



Exercise 1 .9 Communication tools in my generation

Grandparent’s communication tools

Benefits and problems of old tools

Today’s 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 (video stream), video email

+ wide range of choice

- 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 ‘on-call’ all hours

Blackboard, slate + cheap- temporary display

Whiteboard, Smart Board, laptop, photocopiers

+ can save and duplicate information

- expensivePersonal banking + Theft more

difficult- limited opening

hours, time consuming

Online banking, ATMs, telephone banking

+ fast, 27/7 availability

- theft is easier

Exercise 1 .10 Communication technology users1. 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.

2. True.

Exercise 1 .13 Global media networks 1. Global media networks are organisations providing mass communication that reaches

people in many countries. These include television, Internet, films, newspapers, magazines and radio.



Exercise 1 .14 People on the move

22.0%24.3%

8.4%

23.9%

in 1982 in 2006

Born overseasTravelled overseas

3. (c) The percentage of Australians who travelled overseas increased 15.5% between 1982 and 2006.

6. Saving for the holiday

Having the holiday

Preparing for the holiday

• Japanese citizen has a job in Japan

• earns yen and saves for a holiday.

• Japanese person books flight with Qantas.

• Even though they are in Japan the money goes to an Australian company. This is an Australian export.

• 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 totalConference 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 267,200 5.4%Total 4,940,600 100 .0%



Business

Visiting friends/relativesHoliday

EmploymentEducation

Other/not statedConference

2. Some of the jobs (services) that cater to • Conferences – hotels, caterers, car hire, tour operators• Business – hotels, car hire, taxis, interpreters, business services, personal

services • Visiting friends/relatives – transport operators, tour operators, restaurants• 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 20063. 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 Lower travel costs1. 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%)

2. The price of air travel has gone down because there are more passengers, but flights are also more crowded.

Exercise 1 .19 Currencies

Brazil realCanada dollarDenmark kroneEuropean Union euroHong Kong dollarIndonesia rupiahIsrael shekelJapan yenMalaysia ringgitMexico pesoNew Zealand dollar

Philippines pesoSaudi Arabia riyalSouth Africa randSouth Korea wonTaiwan dollarThailand bahtTurkey liraUnited Kingdom poundVenezuela bolivarVietnam dong



Exercise 1 .20 Globalise me1. Kelly’s destination is the United States of America and Hawaii (hint: laptop itinerary

and surfboard).2. Kelly is travelling to attend a surfing competition (hint: laptop itinerary and

magazine).3. Kelly is carrying a computer and a mobile phone. 4. Kelly’s nationality is Australian (hint: passport). 5. The initials FTA on Kelly’s newspaper mean ‘Free Trade Agreement’.

Exercise 1 .21 Global citizen

Some suggested items:

• I eat Italian Food• I shop online• I watch cartoons from Japan• 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 Cultural exports2. Some food products now made in Australia, but once originated in another culture.

• Curry sauce (India)• Potato (Peru) • Chocolate (Mexico)• 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 cn a

d f t r wa i o t ic f l g u o nt o m e r o eo s n i n

d r c i s u m o st s e m a g r e t u p m o cr so ap rs w o h s n o i s i v e l e t



Chapter 2 —Globalisation and Australia

Exercise 2 .1 Australia’s export markets over time 4. a) 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.

b) 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.

5. The main changes in Australia’s export markets from 1950–1951 to 2000–2001 were• 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.

6. (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 International trade at your house 4. 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.

5. Some reasons why governments help their businesses to export include: • Trade helps domestic businesses make more money and creates new jobs.• Trade can give citizens access to a wider variety of goods and services.• Trade encourages innovation in businesses. • Trade increases the wealth of a country.

Exercise 2 .3 Trade and income1. (a) True. There is a link between a country’s trade activity and citizens’ income.

(b) True. Increased trade activity leads to an even greater increase in citizens’ individual incomes.

2. A three precent increase is $15, so a $500 wage will become $515.

Exercise 2 .4 Export businesses1. There were 42,645 export businesses in Australia in 2006–2007. 2. Small business exporters were 39% of the total in 2006–2007. 3. Large business exporters were 10% of the total in 2006–2007.



Exercise 2 .6 Australia’s goods and services exports in 20071. Total value of primary products (A$million)

Coal 20,753Iron ore 16,112Gold 11,555Crude petroleum 7,966Aluminium ores 6,058Natural gas 5,073Beef 4,488Copper ores 3,764Wool 2,746Zinc ores 2,534Meat (excluding beef) 2,028Wheat 1,960Zinc 1704Total: 86,741

2. 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 3,821Business travel 2,536Total: 40,720

3. Total value export manufactures (A$million)

Aluminium 5,888Medicines 3,540Copper 3,202Refined Petroleum 3,183Alcoholic beverages (mainly wine)

3,066

Passenger motor vehicles (such as cars)

2,902

Total: 21,781

4. Percentage of primary products86,741/149,242 x 100=58.1%

5 Percentage of services in top 25 exports 40,720/149,242 x 100=27.3%

6. Percentage of manufactures in top 25 exports21,781/149,242 x 100=14.6%



Exercise 2 .7 Australia’s goods and services imports in 20071. Total value of primary products imports (A$million)

Crude petroleum 14,648Gold 6,128Total: 20,776

2. Total value of service imports (A$million)

Personal travel (including tourism)

13,497

Freight transportation 8,161Passenger transportation 6,658Royalties and licence fees 3,518Professional and business services

3,413

Business travel 2,667Total: 37,914

3. Total value of imports that are manufactures (A$million)

Passenger motor vehicles 13,849Refined petroleum 8,235Computers 6,904Medicines 6,437Telecommunications equipment

6,125

Motor vehicles for transporting goods

5,722

Civil engineering equipment 3,451Aircraft and parts 2,990Motor vehicle parts 2,573Measuring and controlling instruments

2,521

Furniture 2,435Other electrical machinery 2,350Toys, games and sporting goods

2,182

Computer parts 2,167Televisions 2,156Pumps for gas 2109Paper and paperboard 2,094Total: 74,300



4. Possible reasons for both the import and export of cars include• 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. 5. 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 Exports by sector in 20071. Possible products and services include

• Rural goods: beef, wheat, wool, meat• Services: personal travel, education services, professional business services• Resources: coal, iron ore, natural gas, copper• Manufactures: passenger motor vehicles (cars), medicines • Other goods: wine, sugar.

2. Some reasons why the value of Australia’s exports has risen and fallen over the past 13 years are• 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.3. 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 moreServices• a large international event, like Soccer World Cup, could attract many visitors. Resources• winning a new resources contract from a developing country, such as China Manufactures• a major, new invention may sell quickly, such as drugs to prevent some cancersRural• a major crop failure overseas may increase demand for Australian products, such

as wheat.



5. Exports grouped under different headings for different audiences

Rural exports Mineral/fuel exportsbeef coalwheat iron orewool crude petroleummeat aluminium oresmilk and cream natural gascotton copper oresbarley nickel oreswoodchips refined petroleumanimal feed uraniumcrustaceans crude mineralscheese and curd stonecereal preparations sand and gravelraw hides and skins precious metal oresfruit and nuts natural abrasives

Exercise 2 .9 Export celebrity heads

Examples of questions:

• Am I a primary product? • Am I a service?• Am I a manufacture?• Am I edible? • Am I an animal product?


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, tobacco, ivory, art, spices, silk

Ocean going sailing ships, 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 machines, timber, coal, cloth, furs

Steam ships, trains, horse

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

Container ships, aircraft, cars/trucks, trains

Large scale global trade to and from almost every country

Global trade in goods of all types as well as local trade



2. If you live on an island in the Pacific Ocean that has never had contact with other countries, you might not have• tomatoes• spices (most)• rice• books in other languages• international tourists• wool• milk• metal knives.

Exercise 3 .2 Role play

Encourage students to creatively alter the lines in the role play to reflect the different time periods.

Exercise 3 .3 Globalisation drivers activity2. 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 byDistance to traditional markets

Planes and transport vehicles

Food products spoilt RefrigerationTrade barriers (tariffs, quotas) Trade agreementsProduct 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 businesses

Cheaper, faster transport can carry smaller loads in containers and trade agreements lower tariff barriers

Exercise 3 .5 Trade protection in history

Some points to consider:

1. 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.

2. 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.)

3. 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



Exercise 3 .6 Trade agreements 1. The final sale price of 1000 units for each country is

Country Tariff 1000 units + tariffNew Zealand 0% $2500Malaysia 22% $3050United States 5% $2625Saudi Arabia 29% $3225India 33% $3325Thailand 10% $2750Ireland 40% $3500

Example of Malaysia calculation:• Cost for 1000 units = 2500 ($2.50 x 1000)• Tariffs = $550 ($2500 x 0.22)• Total = $3050 (cost for 1000 units + tariff)

2. 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 Subsidies1. 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.

2. (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.



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 floristdoctor personal trainer exporter physiotherapist cabinet maker courier driver


Exercise 4 .2 Reducing Poverty 1. Many East Asian countries have reduced poverty because they have

• reduced their trade barriers through trade agreements• encouraged business involvement in trade• attracted overseas investment• gained more political stability • improved governance (for example by reducing corruption)• lowered inflation• increased access to education• increased productivity.

2. 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.

3. 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).



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 Case study – code of conduct (a) 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

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