6.5 International influences Flashcards
Why do businesses engage in international trade?
International trade presents opportunities for businesses to use imported materials, export their products, or both.
What has been the trend in world trade in recent years?
World trade has grown rapidly, with significant expansion between countries like China, the USA, and the EU.
How can international trade improve relations between countries?
By trading together, countries can build better business, political, and social links.
What are some risks of international trade for domestic businesses?
Risks include loss of jobs and output, decline in essential domestic industries, slow transition to comparative advantage industries, and difficulties for new businesses to compete.
What is the risk of importers ‘dumping’ goods?
Importers may sell goods below cost to eliminate competition from domestic firms.
What happens if the value of imports exceeds the value of exports?
The country could face a loss of foreign exchange.
What impact do international trade agreements have?
They reduce protectionism, such as tariffs and quotas, leading to increased international trade.
What is the role of the World Trade Organization (WTO) in trade agreements?
The WTO promotes free world trade by negotiating agreements that reduce trade restrictions.
What are free-trade blocs?
Groups of countries that trade without restrictions among themselves but impose trade barriers on others, e.g., ASEAN and the EU.
What are some benefits of reduced protectionism and increased trade?
Consumers have a wider choice of goods, economies gain access to necessary raw materials, and competition encourages domestic industries to improve.
How is technology driving growth in international trade?
Technologies like blockchain, AI, and digital platforms are speeding up processes, reducing costs, and enabling global trade in services.
How do mobile payment systems like Apple Pay and M-Pesa impact international trade?
They enable more people, especially in developing countries, to buy products online, making them global consumers.
How might 3D printing affect international trade?
If fully developed, 3D printing could reduce international trade by making it cheaper to produce goods domestically.
What is a multinational business?
A business with headquarters in one country that owns operations in multiple countries, producing goods and services globally.
What challenges do multinationals pose to governments?
Governments face challenges such as job losses in host countries, potential exploitation of workers, environmental damage, and profit repatriation.
