Foreign trade is the key to prosperity. Foreign trade will bring on precession. We must protect our standard of living from the competition of cheap foreign labor. Sometimes in this great rich country of ours, it must seem we can build anything. We can grow anything, that we have everything. We feel powerful, prosperous. We feel we can trade with the whole world or not as we wish. But is trade, twoway trade, important to our nation and the entire world . Lets look at the world. Here are the people of the earth. They represent the work of the world and the markets of the world. Not very evenly distributed, are they . And here are the industrial areas, where people produce goods, generally different good in different countries. Not evenly spread around the world here either. And the resources used by the people in these industries. They are unevenly distributed. So as the world of nations becomes more interdependent, across the trade lanes move certain goods. From the countrys producing more they can use, to other countries people that choose people want and need these things. And do not forget the socalled invisibles. The investments and services such as service, shipping, and traveling, which also can be considered as exports and imports. All right. Is Foreign Trade as simple as that . Lets see. Lets take one example. When one factory exports tractors to brazil. In the office of the export manager, we can the what makes what makes Foreign Trade different from domestic trade, rather free, unhampered trade within our borders borders. In the mail was in order, an order from brazil, south america, for tractors. Can we ship them right out as we might for a Domestic Order . No. There are government barriers for international trade. Here is one. The import license. An import control of the brazilian government. Lets look at these controls. Brazil and many other nations control the foreign spending of their people. If the people continually spend out more funds came in, their send ou tmore funds than came in, their country might lose it monetary reserve. Some government encourages so the government encourages home consumption and discourages the use of foreign goods. The government may, in effect, put up a wall of controls to limit foreign spending. Through import licensing, the government restricts the importing of certain items, for example, the government issues license of tractors when it considers them essential to the economy. Another form of control, an indirect one, is the terrorist, tariff, a special tax. Often, the government charges a tariff or duty, on the import, providing revenue for the government. The may provide revenue for government. A third government control is Exchange Control. The brazilian government approves the use of dollars to tractors, and dollars earned by brazilians must be paid to the government. So import licensing, tarriffs, and Exchange Control are three ways governments limit imports. In this case, a bank letter of credit by which the factory can be paid in dollars. How does this International Payment work . You see, the brazilian buyer must pay in their International Currency to his bank at the prevailing rate of exchange. Through the transfer of exchange by the bank, the united a factory can be paid in dollars when the importer in brazil has only his foreign currency to spend. What do we need to export these tractors . Besides the invoices and other documents specified in the shipping instructions, there may have to be an export license, by which our government may control the amount and destination of certain goods that leave this country, and a declaration for the statistical records of our government. And so we have seen some of the controls by governments over the asked words which leave the exports which leave the country, and over the imports which come into the country. After the transportation, financing, and documents are coordinated, the tractors move onto a train for the first stage of their journey to the buyer in brazil. But selling United States goods in another country is only half of the story. In general, the rest of the world can buy from us only to the extent that we buy something from them. From all of them put together. Lets follow the tractors to brazil and see about that. Brazil is a large, rich country. About the size of the United States. What does brazil have to sell . They have many things, but coffee is the most important. Remember the tractor deal . Us,er of credit to the dollars. Ible in the export of coffee from results the u. S. Works just the other way around. Dollars to a u. S. Bank, letter of credit to eight brazil, which is turned into brazilian currency to pay for the copy. Ffee. This is an example of bilateral trade, almost in effect trading tractors for coffee, but it takes both sides of the story to make the whole thing work. In multilateral trade, more than two countries are involved. In a simple example, u. S. Tractors might go to brazil. The Brazilian Coffee to england, and english textiles to the u. S. Foreign exchange, representing money, goes the other way, and the balance of trade is accomplished on a triangular base. Sometimes the balance is disrupted when governments impose trade restrictions, as when Certain Industries request protections via a tarriff wall. What about competition of foreign labor . Do u. S. Workers lose their jobs when goods are imported . Well, these people in foreign lands are labor competitions, but they are also customers. Electricle, with this traveling crane. British workers may produce competitive goods, but parts of the crane were made in the u. S. Other countries by from the u. S. More than one third of our machine tools, more than one third of our baled cotton, and a good share of our milk, wheat, petroleum. Other countries buy these things from us, making jobs for u. S. Workers. In todays world there are many trade. Ctions on foreigh distribution makes Foreign Trade essential. The combination of industry, workers, and resources tends to make trade necessary. Run materials, goods, and services move from nation to nation, meeting demands and raising the standard of living of everyone. From other countries come such things as asphalt for our roads, fertilizer for our crops, letter for our shoes leather for our shoes. We may regard this tractor and it product from you the united from the United States, but several parts came from other countries. Where would it be without Foreign Trade . Without tin, rubber . Look around you. You will find many things that go to other countries, that come from other countries. Yes, look around you and you will find the importance of Foreign Trade. Next on American History tvs realamerica, roundtrip, the usa and world trade. In 1952 encyclopaedia britannica film presented by the 20th century fund. The film features a Foreign Trade skeptic who sets out to answer his concerns by interviewing workers, a scholar, and industrialists in locations abroad and across the u. S. This is about 20 minutes. [machines running]