Seeking a Balance in International Trade:
Pacific Rim Import-Export Transactions Activity

Teacher Notes

Introduction:

You are part of an import-export company's purchasing department. Your company has come under public and government pressures to achieve an import-export balance or trade surplus favoring the United States. The federal government is offering generous tax breaks over the next five years for any import-export company that achieves a neutral or positive trade receipts. Your company is located in California and does business exclusively with the Pacific Rim nations.

To do a good job of achieving a desirable trade balance, it will be important to investigate the business climate of your trading partners. Try to simulate the free trade environment of the world trade scene today. You must make your trade deals a win-win situation for all parties.

If you are working on this project as a member of a team, divide up the tasks and responsibilities. One person needs to be responsible for keeping the group on task. Others members of the group need to take task which are best suited to their particular talents. All members of the team must be involved in the decision making. All members of the team must accept their responsibility for accomplishing the task. In a team it takes cooperation to achieve success. In the business world it is the companies with the best team efforts that are most successful.

The Task:

You or your group must identify the import-export items needed to achieve a neutral or positive balance of trade.

After identifying the desired trade items and strategies, you must select a country to research from those listed below:

After you or your group have selected the country, prepare a presentation for your company's board of directors.

Resources:

There are numerous resources on the Internet related to international trade and economic issues. Those listed below are a good place to begin. As you widen your search for information, some discoveries can be bookmarked for future use with other projects or assignments.

The Process:

To accomplish this task you will first need to identify the import-export items that you will recommend to the board of directors.

  1. Identify potential export items for your specific country after conducting a need and want criteria.
  2. Identify the current exchange rate and its stability for your trading partner country.
  3. Make up a balance sheet to produce a cost analysis to achieve a balance or surplus of payment status.

After accomplishing the above task, you or your group will do the following.

  1. Identify the best export item(s) for your trading partner to achieve your balance of payment goal.
  2. Identify the best import item(s) for your trading partner to achieve your balance of payment goal.
  3. Determine the exchange rate and its stability and set your policy accordingly.
  4. Write up a brief report on your findings for the board of directors and be prepared to defend it.

Make a presentation to the board of directors on the best items to import and export for each of the Pacific Rim trading partners. After all the presentations the board of directors (class or separate group) selects the best trading partners to achieve a desired balance of payments status for your company and thus become eligible for the tax breaks.

Conclusion:

After all of the reports to the board of directors were presented, which import-export items seemed to be most persuasive to you? Would this also be true for a real board of directors? Why or why not?

Reflection:

Looking back over the process that you used to select the best trade items to import and export:

  1. Describe the process you used to complete this activity.
  2. Are there changes that you would make in how you went about this task if you were to do it a second time?
  3. How did the Internet resource help you the most?
  4. If you were doing this activity or a similar one again, what would you do differently?
Evaluation:

Evaluation of this activity is based on the quality of your research, reasoning and presentation. You need to have considered as many aspects of the international trading world as possible to make your recommendations valid.

Credits
Written by Robert O'Connor
Gahr High School
ABC Unified School District
Last revised 3-20-2006