Topic: Trade (Focus: South Africa and the World)
1. Why People Trade
Key Concepts:
• Trade is the exchange of goods and services for money or other goods.
• People trade because:
o Resources are not evenly distributed.
o Different countries have different strengths (comparative advantage).
o To gain access to goods and services not available locally.
o To make profits.
2. What People Trade
Categories of Trade:
• Goods:
o Raw materials (primary products) – e.g., gold, coal, cocoa.
o Manufactured goods (secondary products) – e.g., jewellery, chocolate,
electronics.
• Services:
o Tourism, education, IT support.
• Skills: Skilled labour in mining, agriculture, construction, etc.
3. Resources and Their Value
• Resources have different values depending on:
o Demand and supply.
o Processing (raw vs. manufactured).
o Market access and trade routes.
• Example:
o Gold (raw) may be valuable, but jewellery (processed) is even more
valuable due to labour and craftsmanship.
o Cocoa (raw) vs. chocolate (processed).
4. Exports and Imports
Exports:
• Goods or services produced in South Africa and sold to other countries.
• Examples: Gold, coal, fruit, wine, automotive parts.
Imports:
• Goods or services bought from other countries.
• Examples: Oil, electronics, textiles.
Importance of Trade for South Africa:
• Boosts economic growth.
• Brings in foreign currency.
• Creates jobs.
• Supports industrial development.
5. Fair and Unfair Trade
Unfair Trade:
• Workers paid very little.
• Unsafe working conditions.
• Exploitation of children and adults.
• Low prices for producers in poor countries.
Fair Trade:
• Workers get fair wages.
• Safe working conditions.
• Community development.
• Environmental sustainability.
6. Case Studies
Case Study 1: From Cocoa to Chocolate
• Origin: Cocoa grown in West Africa.
• Process: Grown → harvested → fermented → dried → exported → processed into
chocolate in developed countries.
• Issue: Cocoa farmers earn very little; chocolate companies earn large profits.
Case Study 2: From Gold to Jewellery
• Origin: Gold mined in South Africa.
• Process: Mining → refining → exporting → turned into jewellery.
• Issue: Gold miners work in tough conditions for low wages; most profit made
overseas in luxury markets.
7. Positive Fair Trade Project Example
Fair Trade Coffee Cooperative
• Farmers paid fair prices.
• Profits used for education, clinics, and clean water.
• Community decisions are democratic.
• Environmental practices are respected.
Activities
Activity 1: Match the Terms
Match the concept with its correct definition.
Term Definition
Exports A. Goods brought into a country
Imports B. Unequal exchange that exploits producers
Fair Trade C. Trade that respects people and planet
Unfair Trade D. Goods sold to another country
Activity 2: True or False
1. South Africa only exports raw materials.
2. Cocoa farmers earn most of the profits from chocolate sales.
3. Fair trade helps improve workers’ living conditions.
4. Services can also be traded between countries.
Activity 3: Case Study Questions (Cocoa)
1. Why do cocoa farmers earn so little compared to chocolate companies?
2. How can fair trade help cocoa farming communities?
3. Suggest two ways consumers can support fair trade.
Activity 4: Resource Value
Which is More Valuable? Why?
Fill in the table:
Raw Material Manufactured Product
Cocoa Chocolate
Gold Jewellery
Activity 5: Discussion or Short Essay
Topic: "Why is it important for consumers to support fair trade?"
