🌍3.2.1.3 - International Trade and Access to Markets Flashcards
What is an import licence?
A licence issued by a national government authorising the importation of goods form a specific source
What are import quotas?
A physical limit on the quantity of goods that can be imported into a country
What are subsidies?
Grants or allowances usually awarded to domestic producers to reduce their costs and make them more competitive against imports
What are voluntary export restraints?
A diplomatic strategy offered by the exporting country to appease the importing country and deter it from opposing trade barriers
What are embargoes?
Impose the partial or complete prohibition of commerce and trade within a particular country. Put into practice for political rather than commercial reasons.
What are the main barriers to trade?
Import licences, import quotas, subsidies, voluntary export restraints and embargoes.
What are trade restrictions?
Other import restrictions may be based on technical or regulatory obstacles such as the quality standards of goods being imported or how they are produced
What is an example of an EU trade restriction?
The import of goods knowingly produced using child labour
What is FDI?
Foreign Direct Investment, the amount of capital invested in foreign countries
What are the main global causes of FDI?
Natural resources and size of a country’s population/market
What is a transition economy?
One that is changing from a centrally planned economy to one driven by market forces
What are some of the top FDI giving countries?
US, UK, Germany, France, Switzerland, Hong Kong, Belgium, Japan, Canada…
What are some of the top FDI receiving countries?
US, Hong Kong, China, UK, Germany, Belgium, Switzerland, France, Canada, Singapore
What are trade relationships?
Alter how and why places trade with each other
What are some examples of trade relationships?
TTP, TTIP, G7, G20, MERCOSUR, Pacific Alliance
Which countries make up the G7?
Canada, France, Germany, Italy, Japan, US, UK
What must the G7 countries have?
A high net national wealth and a high HDI
Why was the G20 set up?
To give a voice to major developing countries in 1999, who felt that the WTO was not fully serving their needs
What are some of the countries involved in the G20?
Argentina, Australia, Brazil, China, India, Indonesia, Mexico, Russia, Saudi Arabia, Turkey etc as well as G7 countries and the EU
How is China investing in Africa?
In old copper mines in Zambia and Botswana needed to support the ‘industrial explosion’ in China
How has China’s investment supported African countries?
They have been able to develop infrastructure as well as healthcare and education
What does China rely on African markets for?
A steady flow of natural resources to sustain manufacturing
What does China export to Africa?
Cheap manufactured goods, FDI, much needed infrastructure and loans of billions of dollars
How much of China’s FDI is distributed in Africa?
50%
How are Chinese Infrastructure programs exploiting Africa?
They are carried out by Chinese workers instead of giving local companies and citizens a vital opportunity to grown in experience and capital. They bring huge profits to Chinese companies
How has China compromised human rights in Africa?
In 2011, Human Rights Watch released a scathing review of treatment of Zambian workers in Chinese owned copper mines, with unsafe conditions, exploitative hours and threats to those who posed complaints
What have Chinese infrastructure programs created?
Roads, bridges, railways, schools and hospitals
How is China benefiting politically from Africa?
It is gaining power as Africa carries great diplomatic weight, shifting China’s diplomatic influence away frm the US
How has China demonstrated its political power in Africa?
It built its first ever overseas military base on the coast of Djibouti, less than 10 miles away from the US AFRICOM, giving access to the Red Sea and Indian Ocean
How does inequality occur within MERCOSUR?
There are different levels of membership, unlike with EU, NAFTA etc
What is SDT?
Special and differential treatment
Why were SDTs set up?
To ensure that protectionist policies wouldn’t exclude many developing countries form trading freely with more developed nations due to tariffs and quota barriers
What were the aims of introducing SDTs?
Tackle the structural handicaps that characterise LDCs
Engage in world trade on a more advantageous level
Promote faster income growth and development
What are LDCs?
Least Developed Countries, a category created by the UN General Assembly
What was the view of creating LDCs?
To provide the least developed among developing countries with special support measures to overcome their specific disadvantages
What are the structural handicaps of LDCs?
A low level of income
A concentration on export of primary goods
Vulnerability to export price volatility
Special and differential treatment is an…
…acquired political right
Developing countries should enjoy privileged access to the markets of…
…their trading partners, particularly in developed countries
Developing countries should have the right to restrict imports…
…to a greater degree than developed countries
Developing countries should be allowed flexibility in…
…the application of certain WTO rules, or to postpone the application of rules
What are some of the issues with SDTs?
Not all LDCs are members of the WTO and application can be lengthy
LDCs are not fully aware of SDTs and so not make productive use of them
There is concern among richer nations that markets will be flooded with cheap imports and undermine their own industrial base
Which country is currently the greatest exporter?
China, followed by the US and Germany
What is the most exported product?
Oil, followed by cars and processed petroleum oil
Which countries are the biggest importers?
US, China, Germany
What is Fair Trade?
A social movement to try and achieve better trading conditions and promote sustainability. Traditionally, products are exported to richer nations from developing ones
What standards does Fair Trade set?
Social, economic and environmental, for both companies and farmers/workers
What do Fair Trade standards ensure?
Protection of worker’s rights
Protection of the environment
Payment of the Fair Trade Minimum Price
What is the Fair Trade Premium?
An additional price to invest in business or community projects of the community’s choice
How do Fair Trade ensure standards are met?
Independent checks
What do members of the Fair Trade movement advocate?
The payment of higher prices to producers as well as helping them achieve improved social and environmental standards
How are Fair Trade producers organised?
International organisations organise them into co-operatives to combine their produce
How do co-operatives benefit producers?
It gives them more influence in governing market conditions and the power to negotiate better deals with suppliers or supply direct
What are alternative trading organisations?
Cafedirect, Oxfam Trading etc, other organisations which focus on application of Fair Trade
What is the main goal of Fair Trade?
To achieve better trading conditions and promote sustainability, empowering the poorest people
What is the main goal of free trade?
Increase economic growth
What does Fair Trade focus on?
Social, economic and environmental standards, trade among individuals
What does free trade focus on?
Trade policies between countries
Who does Fair Trade primarily benefit?
Farmers, workers, comunities in LICs
Who does Free Trade primarily benefit?
MNCs, powerful businesses
What are some of the criticisms of Fair Trade?
Interferes with free market, ineffective, impact too small scale
What are the major actions of free trade?
Countries lower tariffs, labour and environmental standards
What are the major actions of Fair Trade?
Long term relationships, higher labour and environmental standards
What are the key advocate organisations of free trade?
WTO, World Bank, IMF
What are the key advocate organisations of Fair Trade?
Cafedirect, Oxfam Trading, World Fair Trade Organisation
What are the benefits of Fair Trade?
Raises labour and environmental standards
Forms long term relationships with producers
Encourages community development
Benefits the poorest people and prevents exploitation
What are the issues with Fair Trade?
Encourages higher prices for consumers Interferes with free market Inefficient Impact is small scale People don't buy as much of a product
What are some of the largest global TNCs?
General Electrics Vodafone Ford BP General Motors Shell
Why do TNCs base their operations in LEDCs?
Production costs are less
Governments want to host TNCs and so offer financial incentives
LEDCs often have fewer environmental restriction
Why might TNCs base operations in MEDCs?
A place has a history of the industry eg. engineering for car companies
Cheap land in declining areas
Well developed transport
High unemployment, available labour
What are some of the benefits of TNCs to host countries?
Employment Improved technology Infrastructure development Financial support Inward Investment Multiplier effect
What is inward investment?
Local economy is improved without using taxpayer’s money
What is the multiplier effect?
The local economy is boosted by increase personal income generating more ‘buying power’
What are some of the drawbacks of TNCs in host countries?
Labour force Foreign decision makers Profits return to country of origin Grants given to TNCs rather than directly Health and safety issues Environmental issues
How do TNCs positively impact development in NEEs?
Provides jobs through manufacturing
Brings financial attention to area
Contribute to infrastructure development
Invest into the area/country
How do TNCs negatively impact development in NEEs?
Can impact the environment negatively
Can exploit cheap labour
Bad working conditions/rules
How do TNCs positively impact development in LICs?
Raw materials extracted
Materials needed to fuel factories
Provides income/economy
Increased infrastructure to transport materials
How do TNCs negatively impact development in LICs?
Can damage environment
Products not available in LICs
Inequality created within HICs
How do TNCs positively impact employment in HICs?
Create high paid, high skill jobs Attract other TNCs to area Attract highly skilled workforce Enhances reputation Infrastructure development, jobs
How do TNCs negatively impact employment in HICs?
Loss of lower skilled jobs
Often employ foreign nationals
Sufficient work not provided
Tax moved elsewhere
How do TNCs positively impact opinions of global systems?
TNCs can increase trade between LICs/HICs
Can reduce poverty levels - IMF
Increase infrastructure + jobs
Decrease inequality - World Bank
How do TNCs negatively impact opinions of global systems?
Human rights may be violated - UN
Environmental damage - Greenpeace
Tax avoidance - WTO
How do TNCs positively impact product creation and development?
Creates new jobs in design
New technological development
Creates jobs in manufacturing
Improved reliability of products
How do TNCs negatively impact product creation and development?
Can cause increased price
New laws/regulations needed
More secrecy with workers
Creates social divide
How do TNCs positively impact global inequality?
Jobs for people in NEEs/LICs Otherwise unemployed Brings global investments to NEEs Infrastructure development Contributes to economies
How do TNCs negatively impact global inequality?
New products increase inequality
Technology not available in LICs
Prices of products can cause inequality
Creates social divide
What is the general role of the UN?
Maintain international peace and uphold international law
Protect human rights
Deliver humanitarian aid
Promote sustainable development
What is the UNDP?
United Nations Development Programme
What is the role of the UNDP?
Advocates for change and connects countries to knowledge, experience and resources
Helps countries develop strong policies, skills, partnerships and institutions so they can sustain this progress
Create jobs, register votes and put disaster risk reduction plans in place
What are the millennium development goals?
8 goals put in place to be achieved by 2015, replaced by sustainable development goals, with a deadline of 2030 for 17 goals
What do the millennium development goals include?
Eradicating hunger and poverty, gender equality, sustainability
How many millennium development goals were met?
1 of the 8
What is UNEP?
United Nations Environment Programme
What is the role of UNEP?
Co-ordinates organisation’s environmental activities and assists developing countries in implementing environmentally sound practices and policies
Work with Greenpeace and World Bank/IMF
What is the WSSD?
World Summit on Sustainable Development
What is the role of the WSSD?
An intergovernmental conference on sustainable development, focuses on direct action towards meeting difficult challenges, including conserving natural resources
What is the UNFCCC?
United Nations Framework Convention on Climate Change
What is the role of the UNFCCC?
To support the global response to the threat of climate change
What are operational NGOs?
Primarily concerned with development projects adn operational work
What are advocacy NGOs?
Primarily concerned with promoting a cause, rather than doing operational work
