Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Human geography- global systems and governance > 3.2.1.3 International trade + access to markets > Flashcards

3.2.1.3 International trade + access to markets Flashcards

1
Q

what is comparative advantage

A
  • countries should specialise in providing goods + services that they excel at producing
    —> can then trade these for things they aren’t as good at producing —> trade exchanges= fewer barriers to trade
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

what’s free trade

A

trade without tariffs, quotas + restrictions—> WTO replaced GATT to try to + aim for more of this

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

what are barriers to trade + protectionism

A

TARIFFS- tax on imports to protect industry (means consumers buy less imports from foreign countries —> protects industries within country)
IMPORT LICENCE- licence issues by government authorising importation of goods from a specific source
IMPORT QUOTA- physical limit on quantity of goods that can be imported
SUBSIDIES- allowance awarded to domestic producers to make them more competitive against imported goods
EMBARGO- prohibition of commerce + trade with a particular country
TRADE RESTRICTIONS- import restrictions based on quality standards/way they are produced

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

features and trends of global trade

A
  • volume of trade increase but fluctuates
  • growth of trade blocs = some decrease in trade barriers
  • recessions + global shocks = trade stalls= hard to predict recovery rate
  • LICs joining global trade BUT growth is slower —> African countries (2023) only accounted for 3% of global trade
  • NEEs are catching up with HICs as traders
  • growth in ethical trade e.g. FairTrade
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

factors driving current patterns of global trade

A
  • comparative advantage
  • proximity (countries more likely to trade with neighbours, reduced transport costs etc)
  • agglomeration (industries cluster together in area to share skills, info + save costs)
  • Market size + strength (exporters more drawn to big, affluent, growing markets with potential to increase sale volume)
  • geopolitical relationships (political alliances determine which countries co-operate + trade with each other. Conflict= sanctions, embargos
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

who dominates world trade, is the fastest growing region

A

China, Europe, N. America= dominate
Asia Pacific= fastest growing region

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

trade blocs what do they do

A

trade groups
often done regionally
they eliminate barriers internally + can apply trade barriers externally

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

differential access to markets

A
  • access to international markets= limited by tariffs, quotas etc

developed- can afford tariffs, have TNCs= they avoid tariffs, group to form trade blocks

LDEs- struggle to pay tariffs, harder to invest in other countries, difficulties entering agreements on trade, primary sector dominant which is unattractive

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

trading agreements advantages

A
  • improves access to international markets
  • helps LICs that can trade freely at lower prices
  • more leverage when trying to gain access to other markets
  • LDEs have more access to markets if they’re trade group makes agreements with another group
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

trade agreements disadvantages

A
  • restricts ability to negotiate new deals + expand trade beyond bloc
  • may remove protection to growing domestic industries b4 they’re strong enough to compete
  • countries left out= isolated + have to overcome barriers
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

Special and differential treatment agreements (SDTs)

A
  • used by UN for worlds poorest countries to give them access to markets, trading partners have the right to restrict imports so markets can flourish
  • freedom to subsidise exports
    BUT SDTS can cause a flood of cheap goods into HIC markets= undermines HIC industries—> so SDTs are replaced by bi-lateral agreements
    other issues:
  • labour right violations, environmental degradation etc
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

fair trade

A
  • works with farmers + workers to improve living standards, invest in communities + businesses, protects environment
  • different to free trade because considers welfare of producers + workers + ensures fair wages
    examples:
  • banana farmers + workers —> FairTrade works with them to ensure price is more reflective on labour
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

FDI- features and trends of global investment

A
  • FDI increased a lot (1996-$400bn vs 2016-$1500bn)
  • patterns of investment shifted from HICs to HICs and now HICs to NEEs (NEEs are also a source of FDI now)
  • person/company spends money in other countries to generate a profit
  • rise in ethical investment—> investors avoid companies that damage environment etc
  • investors attracted to market size, stability, raw materials, human resources (uneducated labour)
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

Chinas FDI to African countries (NEE to LIC)

A

China to Egypt
- partnership as part of Belt + Road initiative
- China sets up its industries to produce ammonia + green hydrogen
- extends Chinas position along key trade routes + more access to markets e.g. Egypts energy + raw materials
__> meanwhile it reduces unemployment in Egypt —> encourages industrialisation + infrastructure in Egypt’s economy

China in Nigeria
- FDI on coastal railway —> meant more work for Chinese workers, more access to Nigerias developing ppl- selling them products —> China did this for soft power —> Nigeria needs money —> they can develop infrastructure =facilitates trade for Nigeria= strengthens Nigerian currency + allows for diversification

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

what is CPTPP

A
  • trade agreement between 11 countries in Asia Pacific (UK wants to join + did in 2023= it expanded from just Asia Pacific to European country (UK) —> needed after Brexit
  • it lowers tariffs, has provisions to uphold labor rights, environment, protectionism
  • ensures fair treatment for investors
  • may expand further in future to other countries
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

CPTPP how does it help/not help TNC, Individual, environmentalist

A

TNC
- reduced tariffs
- possibility for expansion
- easier supply chain integration
- access to markets + integration
- but TNC has to bide by all rules —> though these rules may stable env.

Individual
- cheaper goods access
- increased range of goods
- may not see economic benefits
- farmer may get produce sold overseas

environmentalist
- more trade= more greenhouse gas emissions
- concerns on food safety + farming + env standards
- palm oil= linked to deforestation
- animal welfare

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
17
Q

trade impacts - economic

A

positive
- competition = cheap prices + greater variety of goods + services
- greater division of labour= greater efficiency in production (more profit)
negatives
- infant industries can’t establish themselves (due to too much competition)
- transport costs
- domestic instability because of dependence on fossil fuels

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
18
Q

trade impacts- social

A

positives
- societies resources are allocated efficiently (no waste)
- exchange knowledge- society benefits
-enhanced quality of goods
negatives
- pollution to environment/health of people
- unemployment- uncompetitive
- greater division of labour ( some countries provide low paid jobs)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
19
Q

impacts of trade on people’s lives- trade between NEES + developed countries

A
  • Apple products developed/manufactured in China —> Chinese workers= US$600 a month + gain access to better devices —> development of people —> Apple shareholders in USA also benefit from sales
  • TATA (Indian steel company) —> there threatened 30,000 Welsh workers, but india= increased share in world trade
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
20
Q

impacts of trade on people’s lives- trade between developed countries + LDCs

A
  • TNCs e.g. M&S, Tesco= source raw materials from LDCs
  • Global agribusinesses buy large areas of land in LDCs + employ people in agricultural estates (but low pay)
  • quality of life for LSC farmers = poor + competitive (if too many countries produce same thing)
  • developed countries tax agricultural imports = hard for LDC farmers to sell
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
21
Q

impacts of trade on people’s lives- trade between NEEs + LDCs

A
  • Chinese manufacturing companies = moved factories to Ethiopia—> Ethiopia can now trade merchandise(not just raw materials), GDP increase
    —> China lending SWF money to LDCs = build education etc
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
22
Q

what are 2 important emerging economy groups?

A

BRIC
MINT

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
23
Q

what’s BRIC

A

Brazil
Russia
India
China
- 4 large economies who are key in world trade
- all have land, mineral-rich, large potential home-market
- China= number 1 exporter of goods

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
24
Q

what is MINT

A

Mexico
Indonesia
Nigeria
Turkey
- 4 fast growing economies
- Nigeria = big exporter of oil
- all countries are manufacturing hubs

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
25
Q

trading characteristics - emerging economies

A
  • rapid factory expansion and industrialisation
  • some countries specialise in goods + services
    e.g. China + Bangladesh = ‘the workshops of the world”, India + Philippines are hubs for call centres, Thailand play an important role in agriculture + manufacturing
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
26
Q

trading characteristics- less developed economies

A
  • agriculture + raw materials trade
  • some countries try to divert e.g. into tourism
    —> Rwanda encourages tourism into its mountain genillas
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
27
Q

trading characteristics- developed economies

A
  • office work
  • services
  • trade in high-tech manufacturing e.g. Germany
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
28
Q

recently…

A
  • tariffs reduced to 1/10th of level in 1947
  • since financial crisis (2008-9) global agreements are more difficult to reach
  • N. America, Europe, east Asia= dominates world trade
  • China= largest growth
  • Trans-Pacific trade= growth faster than Trans-Atlantic
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
29
Q

other facts

A
  • 10 nations account for more than 50% of global trade
  • global trade value + GDP= risen by 2% since 1945
  • GATT was replaced by WTO who aims to lower barriers to International trade and an for “free trade”
30
Q

HDEs - USA

A
  • ‘Protectionist’ economy (reluctant to join free trade agreements)
  • FT agreements were being negotiated with Asia-Pacific countries in TTP + EU in TTIP during Obama —> But Trumps protectionist policies= multi-lateral trade agreements were reversed + withdrawn
  • NAFTA negotiated to form USMCA
  • Trump prefers bi-lateral deals
    now:
  • USA has CAFTA-DR
  • USA has agreements with Australia, Israel, Singapore, Morocco etc
  • phase one agreement= with Japan= in construction (focusing on critical minerals)
31
Q

HDEs- The European Union

A
  • EU= customs union (protectionist in its own way)
  • 27 members who trade freely with each other —> tariffs on ppl/countries outside union (except those in EFTA) —> however the tariffs have reduced + trade deals with Australia etc are being made
  • 65% of trade= intra-regional
  • loss of UK from EU= detrimental—> as UK was big contributor to funds + attracted FDI —> few trade deals with EU were re-negotiated
  • trade agreements with USA = hard to foresee due to disagreements on farming standards
  • anti-free trade sentiment = growing
    —> e.g. farmers in Belgium, France, Netherlands= unhappy with cheap sugar + beef imports
    —> e.g. environmentalists not happy with Brazilian cattle filled with chemicals + not complying with EU standards
32
Q

LDEs- Latin America

A
  • Pacific alliance formed in 2011 with Mexico, Chile etc
    —> its open to bi-lateral trade agreements—> Asia-Pacific= its main market—> some countries in pacific alliance are having fast growth
  • main trading blocs are Mercosur + Pacific Alliance
  • Mercosur- with Brazil, Argentina etc —> free movement of labour, largest exports= raw materials, energy, food (makes it vulnerable to fluctuating global trade prices —> main markets = EU, N. America
    Future:
  • going to be an important trading partner —> might merge with South American nations/countries
33
Q

LDEs - Sub-Saharan Africa

A
  • main trading partner= Europe (but is changing to China) —> China investment into infrastructure for mainly China benefit BUT it increases flows + integration of African nations
  • African continent Free trade area (AFCFTA) —> 5 main regional trade groups (formed in 2018, world largest free trade group (has 54 out of 55))
    —> in increases intra-regional trade deals—> African nations have more power now in global trade —> BUT it may disadvantage the poorest if supportive policies aren’t put in place more policies etc could occur
  • trading is more disadvantaged + less integrated
    —> minimal intra-regional trade
    main exports= primary
    lack of skills, transport + energy + infrastructure = investments discouraged
    relies on imports of manufactured goods
  • has many language + cultural divisions
34
Q

NEEs- China

A
  • fast growth rate due to expansion of manufacturing industry due consumer goods in rich countries - emerged on worlds major trading power —> 20% of all global exports + 15% of global imports
  • patterns:
    —> importing raw materials from developing countries ( Latin America, Sub-Saharan Africa)
    —> exporting processed goods to developed countries
  • trade with USA due to export of cheap, subsidised steel —> resulted in high tariffs in goods traded between 2 countries + in static growth in world trade
  • Belt + Road initiative
  • Famine in 1960s
35
Q

NEEs - India

A
  • sustained fast industrial growth for 25 years
  • more diverse economy than China with a more globally integrated commercial + service sector
  • good english speakers = has trade history with western Europe BUT trade with Middle East + Asia is now growing
  • 2018- imports expanded faster than exports= balance of payment problems= economy vulnerable due to deficit (US $166bn)
  • top exports= refined petrol, rice, cars, diamonds etc (go to EU, USA, China etc)
    top imports= crude oil, gas, coal (from China, USA etc)
  • famine in 1960s —> green revolution stopped this but agricultural workers lost jobs + moved to urban areas for work —> demographic dividend of young workforce = FDI more attracted= industrial development
36
Q

TNCs what do they do

A
  • build bridges between nations
  • architects of globalisation
    they link groups of counties through production of goods
  • they connect people in different countries by shaping common factors of consumption e.g. Macdonalds, Disney
  • they invest internationally (FDI) + expand through acquisitions (taking over other companies + mergers (joining with rival companies)
  • they use sub-contractors to manufacture products e.g. Apple use Foxconn in China to make ipads
  • TNCs are helped + hindered by trade blocs who can make importing/investment easier or harder
37
Q

key term- TNC

A

corporations/companies operating in 2+ countries with headquarters + business operations in many other countries

38
Q

key term- hierarchical model

A
  • imposes top down decision making. top are initiating change, bottom carry it out
39
Q

key term- vertical integration

A
  • where one company owns/controls multiples stages in production
  • they produce everything themselves
  • e.g. Starbucks involved in every stage of its supply chain from growing + processing coffee beans to msking + selling cups of coffee
40
Q

key term- horizontal integration

A

process of business enlarging or varying its range of products or field operation-> e.g. Kraft taking over cadbury in 2010

41
Q

key term- vertical disintegration

A

TNCs bypass production + supply completely by sourcing products + raw materials from already established suppliers rather than directly producing or employing to produce e.g. Foxconn used by Apple in China to make ipads

42
Q

key term- glocalisation

A

products/services that are distributed globally but fashioned to appeal to the consumers in a local market

43
Q

key term - agglomeration

A

when companies in similar industries locate near each other as they can benefit and share ideas and resources

44
Q

key term- multiplier effect

A

when an initial injection of investment or capital into an economy creates additional income e.g. TNC creates jobs —> ppl have incomes —> ppl spend money etc

45
Q

key term- supply chain

A

sequence of processes involved in production of + distribution of commodity from raw materials to finished product

46
Q

key term- diversification

A

improving links between TNCs by acquiring competitors in the same industry + using same structures to make cost savings

47
Q

key term- spreading of locational risks

A

when TNC finds it advantageous to distribute businesses in many countries so union disputes, government instability, financial uncertainty in 1 country doesn’t disrupt overall production

48
Q

key term- flexibility of production

A

being flexible where you locate to enable cheaper labour, flexible workforce, government incentives, better climate etc

49
Q

what are characteristics of TNCs

A

operate in more than one country

globally integrated enterprise

50
Q

TNC characteristics- operating in more than one country

A
  • escape trade tariffs e.g. Nissan produce cars in Sunderland = barrier free access to EU market
  • lower cost location for production (especially labour)
  • take advantage of foreign exchange rates so exports are cheaper
  • reach foreign markets effectively such as Mcdonald’s
  • exploit mineral/other resources available in foreign countries
51
Q

TNC characteristics- globally integrated enterprise

A
  • as they located different functions of business anywhere + integrate production and deliver value worldwide
  • source raw materials/compoenents at lower cost
  • branding of products/ services so recognisable
  • outsourced production
  • control key supplies + each stage of production
  • maximise global economies of scale by organising production to reduce costs
52
Q

TNCs spatial organisation

A
  • headquarters generally in city in an advanced country where they first established e.g. Apples is in California
  • research + development is most likely at headquarters in another area within the same country
  • branch plant is located overseas where cost are minimal. these may vary according to industrial sector.
53
Q

TNC production

A
  • manufactur in developing countries due to labour, education, government incentives, work ethic (ppl more willing to work long hours at low cost), have more resources etc
  • locate service based industries (tertiary sectors in places with low costs balance with language, education + human resources
54
Q

TNC- offshoring

A

relocating part of the organisation e.g. manufacturing operation to overseas location to take advantage of lower costs or access to new international markets
- individual TNCs location factories in higher wage economies e.g. Toyota locating in UK + US to access wealthier markets

55
Q

TNCs - outsourcing

A

strategy that incomes subcontracting part of the business operation to another company, usually to another country where costs are lower e.g. Apple using Foxconn

56
Q

TNCs- linkages between countries through investment

A

MERGERS- when two companies (usually of similar size) agree to become one bigger company- links the countries where two firms operate
ACQUISITIONS- one company buys another (usually smaller) company
SUBCONTRACTING- TNCs use foreign companies to manufacture products without actually owning the business (links countries together)
FDI- flows associated with linkages above
VERTICAL INTEGRATION- company takes over other parts of their supply chain e.g. Shell owning all operation from extraction, refining, transportation, sales, marketing
HORIZONTAL INTEGRATION- company merges or takes over another company at the same stage of production

57
Q

TNCs- reshoring

A
  • when a business returns production/operations to host country that had previously been moved to a different international location
    Reasons:
  • wages and labour costs increasing overseas
  • greater certainty about quality
  • receive complexities and risk of disruptions in supply chain
58
Q

TNCs marketing patterns GLOCALISATION

A

e.g. Mcdonald’s
—> Japan: Teriyaki burger, seaweed fries
Canada: McLobster
- Heinz added flavours that Indians prefer
- Disneyland in Hong Kong reduced prices, changed decorations = more popular now
why glocalise?
- more appealing to customers
- expands market globally
benefit for local economy?
- job opportunities
- increased FDI for economic growth
- more available variety of goods + services

59
Q

positive impacts of TNCS

A
  • employment (job opportunities = positive multiplier effect)
  • investment- TNCs outsourcing + offshoring = maximise profits= brings FDI to LDEs
  • trade TNCs increase trade between countries
  • tech transfer + TNCs introduce new methods of production = improve productivity + create further jobs
  • economic development- due to FDI + employment so LDEs then can grow and improve living standards
  • TNC growth= higher profits + more tax paid which host governments can use to boost living standards
    etc
  • TNCs can set high environmental standards as a result
  • local supply chains created= growth + jobs
  • TNCs demand infrastructure + communications benefit local ppl
60
Q

TNCs negative impacts

A
  • environmental degradation- TNCs exploits natural resources and cause pollution during production process and transport
  • exploitation of workers (sometimes forced to work long hours for low pay in poor conditions)
  • closure of local businesses as can’t compete with TNC
  • increasing inequalities- profits from TNCs not evenly distributed, rich ppl get richer + poor see few benefits
  • loss of culture- cultural differences disappear as TNCs spread Western cultural values + ideas
  • abandoned production locations = derelict land due to deindustrilsation
  • outsourcing TNCs may become unpopular + suffer negative media coverage + falling sales
  • TNCs post no/very low taxes e.g. Amazon paid only £2.4mill corporation tax in £4.2bn of sales in UK
  • depletion + exploitation of natural resources
61
Q

Fair trade (FAT) vs free trade (FRT)

A

FAT- aim to help farmers by offering a financial lifeline (guaranteed price paid for produce even when prices are fluctuating)

FRT- benefits everyone as maximises trade with other countries on activities they have a comparative advantage
BUT reality—> overproduction = lowered market values= independent farmers have to sell at low prices

62
Q

Fair trade (FAT) vs free trade (FRT)- main goal

A

FAT- to empower marginalised ppl + improve quality of lives

FRT- to increase a nationals economic growth

63
Q

Fair trade (FAT) vs free trade (FRT)- focuses on

A

FAT- commerce amount individuals + businesses

FRT- trade policies between countries

64
Q

Fair trade (FAT) vs free trade (FRT)- primarily benefits

A

FAT- vulnerable farmers, Asians + workers in less industrialised countries

FRT- multinational corporations, powerful business interests

65
Q

Fair trade (FAT) vs free trade (FRT)- critics say

A

FAT- interferes with free market, inefficient, too small scale for impact

FRT- punishing to marginalised ppl + environment, sacrifices long-term

66
Q

Fair trade (FAT) vs free trade (FRT)- major actions

A

FAT- businesses offer producers favourable financing, long-term relationships, minimum prices + higher labour + environment standards

FRT- countries lower tariffs, quotas + labour + environment standards + environment standards

67
Q

Fair trade (FAT) vs free trade (FRT)- producer competitor determined by

A

FAT- living wage + community improvement costs

FRT- market + government policies

68
Q

Fair trade (FAT) vs free trade (FRT)- supply chain

A

FAT- includes fewer parties, more direct trade

FRT- includes many parties between producer + consumer

69
Q

Fair trade (FAT) vs free trade (FRT)- key advocate organisation

A

FAT- Fairtrade labelling organisations, International, World Fair trade organisation

FRT- WTO (world trade organisation), world bank, IMF

70
Q

advantages of international trade

A
  • comparative advantage
  • economies of scale- producing narrower range of goods = country can produce in higher volumes + lower costs
  • purchasing power- more competition= prices are lowered= can buy more with money
  • fewer domestic monopolies
  • transfer of technology —> new tech = design improvements + cost savings etc
  • increased employment due to more production—> multiplier effect
  • access more variety + affordable goods
  • get out of poverty
  • economic growth and GDP growth
  • more opportunities in tech sectors
  • more job opportunities
71
Q

disadvantages of international trade

A
  • over-specialisation- not good if demand falls (e.g. Ghana over dependent on Cocoa), comp does better, normally less flexible + diverse
  • ‘product dumping’- exporting at lower price in foreign markets than price charged in domestic
  • stunted growth/ decline in local and emerging industries due to competition
  • increase health flows of viruses e.g. COVID
  • protectionism + tariffs
  • de-skilling due to technology replacing manpower, traditional skills are lost
  • exploitive + labour intensive industries- lowering labour costs etc = maximise profits
  • less opportunities in poor countries and differential access to markets so wealthier countries benefit more
  • trade deficits
  • job loss in certain sectors
  • more carbon emissions from production —> impact quality of life
  • fluctuations in trade
  • over-reliance on TNC can impact economy if it relocates etc
  • LIC- labour exploitation etc
  • growing gap between rich + poor
  • LIC= over-reliant in fluctuating primary goods

Human geography- global systems and governance (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions