Understanding Global Trade: An Instructional Tool

Article excerpt

ABSTRACT

The Trade Game was designed to assist students in understanding the complexity of trade. Teams ofstudents represent countries and try to meet their import and export goals by trading products. The hypothetical countries have different productivity levels, demand needs, trade regulations, and purchasing power. Playing the game helps students become aware of the difficulties that can occur in global trade when some countries restrict the trade of certain products. It can lead to class discussions on trade issues or concepts such as fair trade, circumvention, restrictions, gross domestic product, balance oftrade, and economic development of countries.

Historically, Americans have relied on American-made products and services to fulfill their basic needs. In the last half of the 20th century, however, major changes have occurred in who supplies these items. As the new century approaches, many of our goods and services are being produced in other countries. Cars, electronics, clothes, and even food are imported into the United States from countries around the world on a daily basis (Stone, 1994).

Other nations have experienced similar changes, creating a world of economically interdependent countries. Business is now conducted in a global marketplace. To participate, countries need to be able to import and export goods and services (Dickerson, 1995).

Global trade presents many businesses with major challenges because of differing languages, currency, customs, laws, and trade regulations. it can create economic problems such as trade deficits, unemployment, factory closures, and recessions. Conversely, it can contribute to economic affluence by increasing employment, educational opportunities, and living standards (Dickerson, 1995; Stone, 1994).

As citizens of an interdependent world, global trade affects our daily lives. The news continually reports on the components of global trade such as trade deficits, sanctions, and trading partners. Knowledge of these terms helps us to understand about product availability, employment patterns, and the growing numbers of foreign-made products in the United States.

Global trade is a very complex activity. Rules and regulations that may vary from country to country govern it. Helping students understand the issues involved with trade can be very dry, boring, and tedious. Providing them with an interactive approach to the topic can help to make it more interesting and meaningful.

Research indicates academic learning is enhanced when students are active participants rather than passive spectators in the instructional process. Games and simulations are specifically designed activities that provide opportunities to practice real-life situations. They are enjoyable, educational, and excellent motivators for learning (Heyman, 1975; Kemp & Schwaller, 1988).

The purpose of this paper is to describe an interactive simulation, The Trade Game, that was developed to enhance students' abilities to understand and analyze the complexity of trade among nations. It incorporates a variety of concepts associated with trade, including protectionism, free trade, quotas (quantitative restrictions), circumvention (illegal activities that bypass quota limits), trade balance, gross domestic product (GDP, value of products and services produced by a country), and apparent consumption (GDP + imports - exports). Although the game was originally based on textile and apparel industries, its generic nature makes it useable for teaching trade as a general concept. By altering the products or identifying services, different trade scenarios can be created and issues discussed.

THE GAME

The object of the game is for each country to trade products to meet its economic goals. To play the game, it is recommended that the class be divided into seven teams (representing countries) with three students (who have separate roles) on each team. …