Welcome great EduPodian, here is your Second Term SS1 Commerce Scheme of Work and the excerpt of the Second Term SS1 Commerce Lesson Note.
Scheme of Work:
1 Foreign Trade – Introduction
2. Balance of Trade, Term of Trade, Balance of Payments etc
3. Foreign Trade – Structure and Procedures
4 Foreign Trade – Stages and Documentation
5 Customs and Exercise Authority
6 Terms of Quoting Prices /Methods of Payment in Foreign Trade
7 Ports Authority
8-9 Transportation
10 Water Transportation
WEEK ONE DATE ………………
TOPIC: FOREIGN TRADE
CONTENT
1) Reasons for foreign trade
2) Advantages and disadvantages of foreign trade
3) Barriers to foreign trade
4) Classification of foreign trade
NOTES
Foreign trade or international trade or external trade is the exchange of goods and services between two or more countries e.g. Nigeria, Japan and USA
Reasons for International Trade
1) Uneven distribution of natural resources
2) Differences in climatic conditions
3) Differences in skills and technical know-how i.e. technological difference
4) Differences in the cost of production
5) To augment domestic production of goods and services
6) The need to expand existing market for products
7) The differences in quantity and quality of labour force
8) The need to establish relationship with other countries
IMPORTANCE (ADVANTAGES) OF FOREIGN TRADE
1) It increase government revenue through taxes such as import duties, export duties etc.
2) It improves the standard of living of participating countries by making available
products that cannot be produced by a country
3) It encourages international specialization and its resultant increase in total output
4) It fosters friendly relationship among nations
5) It is a source of foreign exchange earnings
6) It promotes the transfer of technology
7) It creates employment opportunities in participating countries
8) It widens the world market
9) It enhances the promotion of economic development
DISAVDANTAGES OF FOREIGN TRADE
1) It may lead to the destruction of cultural and moral values of a country
2) Excessive specialization may lead to over-production of goods in a country
3) It encourages dumping of goods
4) It may lead to structural unemployment
5) It leads to over-dependence of countries on each other
6) It creates balance of payments problems
7) It creates distortions in the economy e.g. neglect of the agricultural sector in Nigeria
8) It leads to the importation of harmful goods.2
EVALUATION
1. What five benefits does Nigeria derive from engaging in foreign trade
2. State seven differences and three similarities between foreign trade and internal trade
PROBLEMS OR DIFFICULTIES ENCOUNTERED IN FOREIGN TRADE (OR BARRIERS TO FOREIGN TRADE)
1) Problem of distance, transportation costs etc.
2) Currency differences and exchange rate risks
3) Differences in weights and measures
4) Language barrier and communication problems
5) Cultural and religious barriers
6) Political and diplomatic barriers
7) Artificial barriers/regulations e.g. tariffs, quota, embargo, licenses and other economic barriers
8) Documentation and administrative procedures are too many and more complicated
9) Differences in technical specifications
CLASSIFICATIONS OF FOREIGN TRADE
1. Import, Export and Entrepot
a. Import refers to goods bought from other countries
b. Export refers to goods sold to other countries
c. Entrepot refer to buying from one country in order to resell to another
2. Bilateral and Multilateral Trade
a. Bilateral Trade is a trade agreement in which two countries exchange goods and services as trading partners
b. Multilateral Trade: This refers to a situation where a country has more than one trading partner at the same time.
3. Visible Trade and Invisible Trade
a. Visible trade refers to the trade in items of tangible goods – goods that can be seen, touched and felt.
b. Invisible trade refer to the trade in items that cannot be seen, felt or touched. They are usually services e.g. banking transport, insurance, tourism, aviation/air services, shipping services, consultancy services etc.
EVALUATION
1. State and explain five problems likely to be face by a businessman who wants to sell his goods overseas
2. Distinguish between the following tems:
A. Bilateral Trade and Multilateral Trade
B. Visible Trade and Invisible Trade
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