3.2.1.3 Global Trade and Access to Trade Flashcards
where does most trade occur between?
developed countries
e.g 30% of all global trade occurred between US and the EU in 2013
what do LDCs typically export and to who?
primary goods like food, tobacco and minerals
to DCs
why are emerging economies like China and India becoming increasingly important?
china - huge output of manufactured goods and machinery
india - provides a high degree of services with its highly educated population that has low labour costs
what is a trading bloc?
agreements between governments about trade
usually regional e.g. EU and NAFTA
can be arranged around specific industries e.g. OPEC for main oil exporters
what do trading blocs do?
make it easier for countries to trade with others within close geographical proximity
why has OPEC been investigated?
believed to be a cartel
can create a hidden monopoly that sells goods at higher prices than usual market price which causes many injustices upon the consumer
characteristics of free trade
the unrestricted sale of goods and services without constraints of tariffs, quotas or duties
about profits
employed by DCs
characteristics of fair trade
about people
aims to help producers in LDCs to get a fair price for their products
pay more than standard market price to alleviate the cycle of poverty
what is SDT
special and differential treatment
what do SDT agreements do?
give LDCs greater access to markets by letting them bypass tariffs
what do profits of SDT agreements allow/
LDCs diversify the range of industries they have
why do some believe SDT agreements are bad
they allow cheap imports for chosen countries
why do people think trading blocs are better than SDT agreements?
they allow LDCs to negotiate on prices collectively
how does trade affect me?
can benefit from innovation across the world as it is accessible
have a large choice and variety of goods due to brands that provide differentiated goods
how does trade affect HICs
export processed goods at high prices which makes profits and wages (upwards multiplier)
wide range of goods and services available which increase standard of living
