3.2c) What are the actions of governments in new global regions?

Question 1

1) Who was the first British prime minister to embrace globalisation fully?
2) What policies did she implement?
3) Give an example of an industry that was no longer profitable:

Answer 1

1) Margaret Thatcher
2) Industries were left to close if their profitability relied on government subsidies, and the government stopped artificially supporting industries that faced competition from cheaper overseas products.
3) They coal industry, which was destroyed due to imports being cheaper, during the 1980s and 1990s.

Question 2

1) Which two strategies did the Conservatives adopt instead?

Answer 2

1) > Gave tax breaks and subsidies to companies investing the London Docklands. Almost all companies establishing themselves in London’s Canary Wharf since the 1990s, have life-long tax breaks. This has attracted many large overseas financial institutions.
> Gave grants and subsidies to companies, so they could re-locate their manufacturing plants to the UK. Nissan and Toyota were attracted.

Question 3

1) In 2015, where was the UK ranked, on the list of the largest recipients of FDI.

Answer 3

1) 4th largest recipient

Question 4

1) What is the ‘open door’ policy, which China implemented in 1978.

Answer 4

1) It allow western investments and technology to enter its country.

Question 5

1) What are special economic zones?

Answer 5

1) They offer tax incentives and cheap labour in order to attract FDI. These incentives aren’t offered in other parts of the country.

Question 6

1) When did China become a member of the World Trade Organisation?

Answer 6

1) 2001

Question 7

1) In 2005, how many of China’s exports came from foreign companies?

Answer 7

1) 50%

Question 8

1) Who is the world’s largest recipient of FDI?
2) Which countries mainly control the flow of FDI?
3) Where do they invest their money?
4) By how much did investment flows from the BRICS to other nations, grow between 2000 and 2012?

Answer 8

1) China
2) The BRICS nations
3) In the USA, EU, sub-saharan Africa and South America. China is now involved in both the inflow and outflow of FDI.
4) Increased twenty-fold (to $145 billion) between 2000 and 2012. Now accounts for over 10% of the global total.

Question 9

1) What other agreements does the US have, outside its main trading block?

Answer 9

1) It has free-trade agreements with the UAE and South Africa.

Question 10

1) What other agreements does the China have, outside its main trading block?

Answer 10

1) They have formed agreements with ASEAN and APEC to form an East Asian bloc.

Question 11

1) What other agreements does the EU have, outside its main trading block?

Answer 11

1) The EU has economic agreements with 69 African, Caribbean and Pacific nations, many of which are former colonies.

Question 12

1) What are inter-governmental Organisations?

2) Give an example of a policy of mutual interest:

Answer 12

1) These are partnerships constructed by the governments of the wealthiest countries, with the purpose of developing policies of mutual interest.
2) Tax payments by TNC’s.

Question 13

1) Give an example of an informal economic partnership:

Answer 13

1) China’s engagements with sub-Saharan Africa.

Question 14

1) What is OPEC?

Answer 14

1) It represents 40% of oil producers and influences oil prices.

Question 15

1) What is the OECD?

Answer 15

1) The Organisation for Economic Co-operation and Development is a global ‘think tank’, of the 34 wealthiest nations.

Question 16

1) What is the G7?

Answer 16

1) They represent 50% of global GDP, and meet annually to discuss development.

Question 17

1) What is the G20?

Answer 17

1) Comprises of 19 countries plus the EU. Formed in 1999 to bring developed and developing countries together, to discuss key economic issues.

Question 18

1) In the case of Ghana, how do commodity traders dictate global cocoa prices?
2) What is good about the futures market?
3) How does the Ivory Coast directly supplying TNC’s, impact the market?

Answer 18

1) They buy cocoa in advance for TNCs like Cadbury.
2) Guarantees the supply, price and delivery date of the product months ahead.
3) The puts downwards pressure on prices.

Question 19

1) In the case of Ghana, how do overseas tariffs dictate global cocoa prices?
2) Why doesn’t Ghana process its cocoa beans?

Answer 19

1) The EU sets tariffs for processed cocoa, but not for raw cocoa beans. Ghana could gain income by processing its cocoa beans.
2) Tariffs would be applied on entry into the EU, forcing Ghana to export the raw product.

Question 20

1) In the case of Ghana, how does unequal power dictate global cocoa prices?
2) How does this disadvantage them in the face of American and European farmers.

Answer 20

1) When Ghana joined the WTO in 1995, they to stop subsidising their own farmers.
2) The aforementioned receive subsidies, unlike the Ghanaian farmers, many of which have given up.

Question 21

1) In 2014-15, the EU and ASEAN negotiated new trade deals, which was the largest of these.
2) How many jobs in the EU depend on exports?
3) What items does Vietnam export to the EU?
4) What does the EU export to Vietnam?
5) Why could Vietnam be more attractive than China?

Answer 21

1) The largest was with Vietnam, and it involved removing all import duties and quotas on items traded between EU countries and Vietnam.
2) 31 million - Hence why it is important for the EU to have access to a growing market like Vietnam, which has 90 million consumers.
3) Telephones, electronic goods, footwear, clothing, coffee, rice, seafoods and furniture.
4) Electrical machinery, aircraft, vehicles and pharmaceuticals.
5) Labour costs are lower in Vietnam.

Question 22

1) In the 1980s, how much of Guatemala’s cotton crop was exported?
2) What was the money used on?
3) How could Guatemala have increased its earnings?
4) How much of the land devoted to cotton would have been needed, if the cotton was processed, to create the same amount of profit?
5) What did WTO policies lead to?
6) What do TNC’s do now?

Answer 22

1) 75%
2) Pesticides, machines and equipment for future crops.
3) By processing its cotton into finished products.
4) 1%
5) Tied Guatemala to exporting cotton, until foreign competition caused production to stop in 2005.
6) They import raw cotton into Guatemala, and use its workforce.