4.1.3 Pattern of trade

Question 1

what factors influence the pattern of trade and changes in trade flows between countries

Answer 1

1. comparative advantage
2. impact of emerging economies
3. growth of trading blocs and bilateral trading agreements
4. changes in relative exchange rates

Question 2

How does comparative advantage influence the pattern of trade?

Answer 2

• there has been a recent growth in the exports of manufactured goods from developing countries to developed countries

Question 3

Why has there been more exports from developing countries to developed countries?

Answer 3

Developing countries have gained an advantage in the production of manufactured goods, due to their lower labour costs, so production shifted abroad

Question 4

Why has manufacturing sector declined in some countries like the UK?

Answer 4

• deindustrialisation
• production of manufactured goods has shifted to other countries, such as China, whilst the UK now focuses more on services, such as finance
• China and India now take a much larger proportion of world trade

Question 5

How do emerging markets influence the pattern of trade?

Answer 5

• the collapse of communism has meant that more countries, especially developing countries, are participating in world trade
• international trade is arguably more important for developing countries than developed countries
• as economies emerge they take up a larger proportion of exports, since many develop through export-led growth
• they also import more, since rising incomes means that consumers demand more goods and services