4.1.3 Factors Contributing To Increased Globalisation Flashcards
What is globalisation?
Globalisation is the process by which the world is becoming increasingly interconnected as a result of massively increased trade and cultural exchange.
What is trade liberalisation?
Trade liberalisation is the process by which international trade is made easier through relaxation of tariffs and barriers.
What are the 3 benefits of GATT?
-New jobs for unskilled workers
-Countries enjoyed trade benefits (billions)
-Labour intensive production manufacturers in developing nations, enjoyed comparative advantage because of low labour costs.
What is GATT?
A general agreement on tariffs and trades, which raised living standards around the world as it allowed developing nations to export their goods to more industrialised ones.
What is WTO?
The world trade organisation exists to reduce barriers to trade and ensure countries keep to agreements made.
-It deals with complaints and organising negotiations.
-It also encourages trade liberalisation.
Why are tariffs imposed?
-Governments want to protect their domestic businesses so they use; tariffs, quotas and legal regulations to slow the rate of imports coming into a country.
-They might want to stop imports which will compete with state monopolies.
-Tariffs also generate important sources of income for poorer countries.
-Liberalisation is the easing or dropping of these measures.
What are the benefits of trade liberalisation?
-Trade liberalisation is the process of taking down the barriers to trade between nations, removing quotas and tariffs.
-Consumers ultimately benefit because liberalised trade can help to lower prices and broaden the range of quality goods and services available.
What the benefits to a business of trade liberalisation?
-Companies can benefit because it diversifies risks and channels resources to where returns on investment are highest.
-Trade openness also means; competition, investment and increases productivity.
What are the drawbacks of trade liberalisation?
-Competition can intensify and profit
margins can end up being squeezed.
-Employment may only be temporary or menial.
-Increased trade = increased demand meaning land can become polluted.
-Developing nations can become economically dependent on industrialised ones.
How has political change led to an increased globalisation of markets?
-Politics now happens on a global scale with regular meetings between heads of state.
-This has led to less protectionist policies and more open trade.
Who are the G7 countries?
Canada, France, Germany, Italy, Japan, UK and USA
What is special about the G7 group?
-These countries are the 7 major advance economies.
-They represent more than 64% of the net global wealth.
-High national wealth and HDI is the main requirements to be in this group.
How has globalisation been caused by a reduced cost of transport?
-Cost of transporting goods long distance has been reduced by cargo containers.
-Cheaper flights for business meetings.
-Can gain a business EOS shipping large quantities at once.
-Communication and trade via internet has been a huge catalyst for change.
-Farflung countries are no longer isolated from the global market place.
How has globalisation been caused by an increased significance of MNCs?
-Globalisation has been caused by some large companies setting up or buying existing businesses in other countries.
How has globalisation been caused by FDI?
-Businesses outside of important trading blocs will invest in a business or set up production inside the trading bloc to get round tariffs.
-Can give a country income generation (jobs, GDP growth and skill transfer)
