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OCR A LEVEL GEOGRAPHY > Global Connections: Trade In The Contemporary World > Flashcards

Global Connections: Trade In The Contemporary World Flashcards

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1
Q

What national statistics of international trade are used to measure patterns of trade?

A
  1. Values of exports and imports
  2. % share of world exports or imports
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2
Q

Give 4 international organisations that regulate trade and provide data

A
  1. WTO (World Trade Organisation)
  2. UNCTAD (United Nations Conference on Trade and Development)
  3. IMF (International Monetary Fund)
  4. OECD (Organisation for Economic Co-operation and Development)
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3
Q

What does WTO do?

A
  • Deals with roles of trade between nations
  • Bilateral trade agreements - once signed are ratified
  • The goal to ensure trade floes smoothly and freely as possible
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4
Q

What does UNCTAD do?

A
  • Due to the globalisation of trade helping lift people out of poverty , challenges still remain
    Therefore, UNCTAD helps LIDCs access the benefits of the globalised economy. Helps deal with the potential drawbacks
    -Offer technical assistance
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5
Q

What does IMF do?

A
  1. Further international monetary co-operation
  2. Encourage growth of trade and economic growth
  3. Discovering proxies that would harm prosperity
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6
Q

What does OECD?

A
  • Works to build better policies for better lives
  • goal to shape policies that foster prosperity and equality for all
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7
Q

What international BODIES monitor major trade for products of merchandise, services and capital?

A
  1. International Sugar Association - Sugar
  2. Organisation of petroleum exporting countries - Oil
  3. International Bar Association - Law and Justice
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8
Q

Why are global patterns of trade uneven?

A

Dominated by ACs and EDCs as they have more political and economic stability.

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9
Q

What three are three types of trade does international trade consist of?

A

Merchandise - Products and goods
Services - Tradeable activities
Capital - Accumulated wealth used to make more wealth (ei assets or stocks)

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10
Q

What are two types of merchandise?

A

Primary products - raw material (ores, metals, oil)
Secondary products - manufactured goods (Cars, medicine etc)

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11
Q

What are 4 factors that show spatial variation in trade?

A
  1. Direction of flow (Exported vs imported)
  2. Volume of trade
  3. Composition of trade (Merchandise/Services/Capital)
  4. Value of trade (how much a country profits)
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12
Q

What are 5 economic factors that influence patterns of international trade?

A

-Infrastructure (ei ports, airports, trains etc)
-Technology
-Transport (Boats, planes, trains, cars etc)
-FDI
-Cost of production of product.

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13
Q

What are 4 social factors that influence patterns of international trade?

A

-Demographic factors (age, migration affecting labour etc)
-Stage in demographic transition
-Female employment
-Levels of education

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14
Q

What are 5 political factors that influence patterns of international trade?

A

-Super-national organisations
-Regional trading blocs
-National government policies
-Trade agreements
-Tariff/non-tariff borders.

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15
Q

What are 4 environmental factors that influence patterns of international trade?

A

-Distribution of natural resources (ei oil, metals and ores)
-Climate, soils, water security (affecting food products etc)
-Deep-water ports
-Natural hazards

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16
Q

Why is trade becoming more complex?

A

Outsourcing

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17
Q

What is outsourcing?

A

Is a cost-cutting strategy where a company has a comparative advantage over another company and produces goods in another country (usually LIDCs) for cheaper workforce when they could do it at home.

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18
Q

What are 4 factors that influence the uneven distribution of services?

A
  1. Highly skilled workforce in ACs
  2. Strength and reliability of financial institutions
  3. Ability to supply commercial services
  4. Level of government and private investment
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19
Q

What are tangible items?

A

Are a type of capital such as commodities, minerals, land, real estate (Ownership of physical items)

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20
Q

What are intangible items?

A

Are a type of capital such as currency, stocks, and bonds traded on financial markets (Ownership of non physical items)

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21
Q

What is the relationship between flows of merchandise and services and flows of capital?

A

Capital flows in the opposite direction to merchandise and services as it is something the sender receives.

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22
Q

Why are flows of capital increasing since the 21st century?

A

More LIDCs are being integrated into the global trading system
TNCs invest money into the global supply chain

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23
Q

How does India encourage the inward investment of FDI?

A
  1. Treaties have been signed by India and Singapore to help countries to avoid high taxation.
  2. India promotes the building of infrastructure such as ports and airports to help investing companies have relaxed restrictions for oil refining, telecommunications and retail so it assists India’s development.
  3. India raised inward investment ceiling allowing companies to invest more helping the telecommunications sector grow
  4. The reserve bank of India facilitate transactions for mergers, takeovers and new investment
  5. Reduce taxes.
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24
Q

What is inter-regional trade?

A

Trade between regions (ei UK and USA)

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25
Q

What is intra-regional trade?

A

Trade within regions (Ei countries within Europe)

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26
Q

What is comparative advantage?

A

The principle that countries benefit from specialising in an economic activity in which they are relatively more efficiently or skilled at producing that another country (ei UK and cars).

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27
Q

What is the relationship between patterns of international trade and socio-economic development?

A

-Close relationship
-Measured by value of exports and HDI
-Chinas HDI is lower than would be expected for such high exports
-But overall high exports = high HDI
-Close relationship between percentage of world trade and QoL for example.

BUT NOT ALWAYS

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28
Q

What initiative did WTO launch in 2005 to help developing countries expand their trade?

A

Aid for Trade Initiative

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29
Q

What conference was the Aid for trade Initiative reinforced at?

A

Bali Ministerial Conference 2013. Systems were set up to allow LIDCs to integrate into the global multilateral trading system.

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30
Q

How does international trade promote stability?

A
  1. International trade contributes to stability and peace especially if countries are under the WTOs most favoured nation principles.
  2. Encourages co-operation via multilateral trade
  3. Some bilateral trade agreements extend beyond trade to assist with political issues such as strengthening democratic processes and human rights.
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31
Q

How does international trade promote economic growth?

A
  1. Allows for further FDI, growth of GDP and production growth
  2. Employment opportunities, incomes raised, poverty levels reduced
  3. Positive multiplier effect, enhanced at an international scale.
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32
Q

How does international trade promote development?

A
  1. Remove tariffs which can help countries grow which reduces poverty, and increases social factors such as health, education and infrastructure.
  2. MNC (Multi-national cooperation) have corporate responsibilities as they have to follow the global compact to stop the de investing of FDI into countries.
  3. Memberships if trade and political unions with a common purpose to help economic development.
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33
Q

How does the flow of people influence international trade?

A

-Is important for the circulation of ideas and information from the people
-High skill workforce leaving LIDCs to go to ACs for better employment causes BRAIN DRAIN
-Also share ideas and information with colleagues in their native countries
-If migrants return to their place of origin they can disseminate their skills they acquired.

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34
Q

How does the flow of technology influence international trade?

A

Technology is important to international trade as it can reduce costs and speed up movement of products. Can do this by:
1. Border controls with electronic messaging, data storage, retrieval systems, helps speed up customs.
2. Online trading currency platforms, exporting is now simpler, cheaper and quicker.
3. Cloud - used to track productivity, improve security and reduce thefts of data.
4. Mobile phones, allows for mobile transfers of capital.

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35
Q

What countries show the importance of trade?

A

BRICS - Brazil, Russia, India, China, South Africa
TRADE BENEFITED THEIR DEVELOPMENT

36
Q

What inequalities can trade promote?

A
  1. Many LIDCs have limited access to global markets: widens the development gap
  2. Skilled workers tend to benefit most from employment opportunities created by trade.
  3. Internal inequalities are exacerbated by trade activity, especially in concentrated parts.
37
Q

What conflicts can trade create?

A
  1. Trade disputes can arise over tariffs, prices of commodities and changes in trade agreements.
  2. Borders and customs authorities can be subject to corruption and breaches of security.
  3. Port development, mining and deforestation linked to trade create environmental conflicts
38
Q

What injustices are created from trade?

A
  1. Displacement of communities can result from land grabbing by investments in industry and agri-business.
  2. Use of child labour and other forms of modern slavery in attempts to secure cheap labour
  3. Unequal power relations, unfair trade rules such as tariffs and other trade barriers and opening up to free trade can affect businesses such as small scale farmers or fishermen in LIDCs.
39
Q

How can flows of technology promote inequalities, conflict and injustices?

A
  • Unequal access across the world
  • Uneven internet connectivity limit access to global markets
  • Unequal access to technology means that border controls and customs are more vulnerable to breaches of security and corruption
40
Q

How can flows of capital promote inequalities, conflict and injustices?

A
  • Can have negative impact on indigenous populations and environment
  • Land grabbing can displace local communities and leads to food shortages.
  • Mining can lead to health impacts and pollution
41
Q

What are 6 factors that has made trade become increasingly complex since the 21st century?

A
  1. Technology, transport and communications which have increased connectivity of supply chains
  2. The influence of MNCs in EDCs and Outsourcing
  3. The role of trading blocs
  4. The growth of SOUTH-SOUTH trade between developing countries
  5. The growth of services in the global economy
  6. Increased labour mobility and the NIDL
42
Q

What are global supply chains?

A

Network of suppliers, manufacturers, distributors, retailers and the customer.

43
Q

What is the driving force behind global supply chains?

A

Globalisation

44
Q

What are the 7 pillars that ease market integration of the supply chain?

A
  1. Domestic market access
  2. Foreign market access
  3. Border administration
  4. Availability and quality of transport infrastructure
  5. Availability of transport services
  6. Availability of internet access
  7. Operating environment.
45
Q

What is a global value chain?

A

Each stage of manufacturing of primary resources will increase in value ei raw oil is less money than refined oil.

46
Q

What are the risks for being involved in a global supply chain?

A
  1. Ensuring availability of product at all times
  2. Political and economic instability
  3. Natural hazards
  4. Customs issues
  5. Terrorism and piracy
  6. Cyber-crime
  7. Ethical issues
47
Q

Why is technology essential to trade?

A
  1. Connects customers with producers along supply chains quickly and easily.
  2. Facilitates flows of finance
  3. Tracking shipments
  4. Logistics competency in reducing shipping times
  5. Internet of things and big data can increase the efficiency of supplying.
  6. Border control and customs

However ICT use and access to broadband is uneven, in 23019 less than 1-100 had broadband in sub-Sahara Africa.

48
Q

What type of transport is essential to international trade?

A

Container ships and deep water ports
LIKE FELIXSTOWE

49
Q

What is the Enabling Trade Index?

A

Is a benchmark for governments looking to boost growth and development through trade.

50
Q

What group dominates international trade?

A

MNCs/TNCs.
Top 500 companies account for 70% of flows of goods, services and globalisation.

51
Q

Why did JCB invest into India?

A

1, Open market economy since 1990
2. Trade liberation reducing controls on foreign trade and investment.
3. Growth of inward and outward FDI
4. Investment in education creating a skilled workforce
5. Investment in infrastructure and technology and communications
6. Development of global trade agreements.

52
Q

What are some economic advantages that TNCs have when investing into countries?

A

-Provide inward investment
-Create jobs for local people
-Boost exports
-Improve trade balance
-Increase spending, which creates a positive multiplier effect in local economies
-May attract related investment by suppliers and create clusters of economic activity

53
Q

What are some economic disadvantages that TNCs have when investing into countries?

A

-Lack of security with closure of operations as lower costs for locations will attract investment elsewhere.
-Lack of control with key decisions that have important economic implications for a country when companies are taken overseas.
-Competition leads to closure of domestic firms

54
Q

What are some social advantages that TNCs have when investing into countries?

A

-Increases incomes
-Raises standard of living
-Develop and improve skill levels
-Improve technology

55
Q

What are some social disadvantages that TNCs create when investing into countries?

A

-Exploitation of workforce
-Poor work conditions
-Low wages
-Jobs are usually low skilled labour intensive jobs

56
Q

What is the case study used as an example of outsourcing services in IT?

A

Bangalore

57
Q

Give some background detail about Bangalore

A
  • 5/10 top outsourcing countries in the world
  • Employs 10 million people
    -40% Of India’s IT industry
  • 500 companies
  • $85 billion in exports
  • CORE REGION
58
Q

Why has Bangalore been so successful in IT outsourcing services?

A
  1. Highly skilled and professional workforce due to good education (University)
  2. English speaking workforce
  3. Relatively low labour costs
  4. Reduced costs by souring infrastructure in one locality rather than overseas
  5. Positive government incentives for investment
  6. Raised market profile from a recognised specialist location.
59
Q

Name 6 trading Blocs

A
  1. NAFTA (North America Free Trade Agreement)
  2. EU (European Union)
  3. ASEAN (Association of South East Asian Nations)
  4. COMESA
  5. MERCOSUR
  6. CORICOM

ONLY NEED TO KNOW TOP 3!!!

60
Q

What are trading blocs?

A

A trade bloc (not free trade) is a group of countries that are geographically close that agree to reduce trade barriers between them. They promote free trade between members, increasing economic globalisation.

61
Q

What are 3 categories of regional trading blocs?

A
  1. Free trade areas - member states have signed free trade agreements (reduce tariffs)
  2. Custom areas - member states have agreed to charge the same import duties as each other
  3. Economic unions - make up a common market. Have common policies on product regulation and common external trade policies.
62
Q

What is the purpose of trading blocs?

A

Achieve economic benefits through trade policies

63
Q

Give three trading policies that member states use to achieve economic benefits in trading blocs.

A
  1. Encouragement of intra-regional free trade between member states by removing tariffs.
  2. Protection of manufacturing and service industries from foreign competition by using tariffs and subsidies (so the countries dont buy products outside the trading blocs for cheaper).
  3. Entering into inter-regional trade agreements with other countries/trading blocs.
64
Q

How significant are trading blocs on global trade and which trading bloc is t he largest?

A

They have a very significant effect on global trade.
Biggest bloc is the EU
-28 full member states
-520 million population
-2013 was responsible of 16% of the world trade.
-2013 ;leading countries of EU (UK, Spain, Italy, Germany) accounted for 72,3% of intra-EU trade and 79.9% of EU trade with the rest

65
Q

EU operates as a single market. What 4 measures were put in place to reinforce its powerful position in global trade?

A
  1. Trade defence policy - Price dumping occurs (non-EU countries drop prices of imported goods) so the EU increases the import duty on theses goods so that it protects businesses selling the same product in the EU. However LIDCs will be restricted in selling goods.
  2. Trade and development policy - EU adopted preferences for LIDCs and specific imports by reducing tariffs so they are favoured, so they can develop. However LIDCs may be marginalised so could cause conflict.
  3. Free trade agreements - Where countries inside the EU dont have to pay tariffs to trade with eachother. Allows for increased stability and will expand.
  4. Development of trade partnerships - The EU-USA Transatlantic Trade and Investment Partnership (TTIP) removes tariffs between EU and NA.
66
Q

What is the South-South cooperation?

A

-Collaboration among countries in the southern hemisphere
-Developing countries share knowledge, skills, expertise and resources
-Bi-lateral, regional, sub-regional or inter-regional trade

67
Q

What are the objectives of the South-South Cooperation?

A

-Increase stability of developing countries
-Collectively analyse development issues
-Strengthen technological capacity
-Increase communication
-Allow LIDCs to achieve participation
-Help and recognise the least developed, land locked countries.

68
Q

What are the benefits of the South-South cooperation?

A

-Strengthening the voice of LIDCs
-Opening additional channels of communications
-Enhancement of the multiplier effect
- Development of technology
-Promotion of natural science, economic and social planning, research etc.

69
Q

What has driven South-South trade in China and India?

A

-Rising demand for raw materials and energy to fuel development
-Vast size of potential customers
-Increasing demand from growing middle class
-Intra-regional trade, emerging nations and immediate neighbours
-Growth in FDI

70
Q

Why have the least developed countries been marginalised in the South-South Coorporation?

A

-Low productive capacity
-Limited economic diversification
-Limited resources
-Poor governance
-Landlocked countries in Africa
-Limited access to tech

71
Q

What is the case study for a core region that benefits from trade?

A

USA

72
Q

What is the case study for a peripheral region that benefits from trade?

A

Sierra Leone

73
Q

What are the 4 factors that contribute to the strength of USA trade?

A

Economic
Environmental
Political
Social

74
Q

What are 5 economic factors that contribute to the strength of USA trade?

A
  1. Investment into transport infrastructure (rails, airports, pipelines, freeways and ports)
  2. High levels of productivity in agriculture, manufacturing and service industries
  3. Inward and outwards FDI by TNCs (MNCs)
  4. Technology in communications
  5. Strong demand from large market in the US so is self sufficient
75
Q

What are 3 environmental factors that contribute to the strength of USA trade?

A
  1. Ability to exploit its many natural resources such as minerals, ores, water and timber.
  2. Wide range of climatic conditions, soils and relief which benefit agriculture
  3. Extensive coastline with natural harbours and access to rich fishing grounds
76
Q

What are 2 political factors that contribute to the strength of USA trade?

A
  1. Stable, democratic government, who have the ability to negotiate trade agreements providing easy access to global markets
  2. Membership of global organisations such as the WTO and NAFTA promote trade
77
Q

What are 3 social factors that contribute to the strength of USA trade?

A
  1. Large population/work force with high levels of education
  2. Diverse multi-cultural migrant labour force
  3. Highly skilled and educated work force
78
Q

What are 4 opportunities created by international trade in the USA?

A
  1. Job creation - 9 million jobs depend on trade in NA
  2. Investment leads to the economic multiplier effect
  3. Relations between countries can develop beyond economic to include political relations and cultural understanding
  4. ACs such as the USA can have global influence into the global supply chains
79
Q

What are 4 challenges created by international trade in the USA?

A
  1. Rapid growth of container ports leads to environmental issues (California ports are the biggest source of pollutions
  2. Recent trade disputes with Mexico accused of “price-dumping”
  3. Border control is an increasing issue in terms of illegal migration and illicit trade
  4. Growing trade deficit with China who produce goods at lower costs than US so companies cannot compete.
80
Q

What are the 4 factors that contribute to the weakness of Sierra Leone’s access to global markets?

A

Economic
Political
Social
Environmental

81
Q

What are 6 economic factors that contribute to the weakness of Sierra Leone’s access to global markets?

A
  1. Overdependence on the exporting of primary products such as ores and crops so when the prices change it can cause damage
  2. Limited access to finance
  3. Inadequate infrastructure such as transport networks and ports
  4. Poor communications technology
  5. High costs of production
  6. Low levels of technology
82
Q

What are 3 political factors that contribute to the weakness of Sierra Leone’s access to global markets?

A
  1. Slow recovery from consequences of civil war, previous political instability has affected confidence of investors
  2. Inefficient government and corruption
  3. Inability to control crime due to weak state apparatus again less investment
83
Q

What are 5 social factors that contribute to the weakness of Sierra Leone’s access to global markets?

A
  1. High level of unemployment - 70% of under 25s unemployed
  2. Inadequately educated work force with high percentage of people not reaching secondary school (more women than men)
  3. Gender inequality presents serious barriers
  4. Other human rights abuses such as the use of child labour
  5. Other socio-economic inequalities in health, poverty and life expectancy
84
Q

What are 2 environmental factors that contribute to the weakness of Sierra Leone’s access to global markets?

A
  1. Debilitating effects of the population/work force due to diseases
  2. Limiting effects of environmental damage to water, soil and forest reserves as a result of large-scale mining operations
85
Q

What are 5 opportunities created by international trade for Sierra Leone?

A
  1. Has the support of bilateral trade partners such as China, UK and the USA which has helped finance medical teams, new hospital, and airport and rail networks.
  2. Membership to ECOWAS has benefited by abolishing tariff barriers between member states.
  3. Membership of the Mano River Union has involved Sierra Leone in social and economic development programmes.
  4. Multi-lateral donors have set up the Small Holder Commercialisation Programme providing tractors, processing equipment and reclaiming swamps and improving roads to markets.
  5. Political stability and good trade relations have improved since the civil war, with three successful elections
86
Q

What are 4 challenges created by international trade for Sierra Leone?

A

1.Reducing barriers which inhibit participation in the global value chains, and is restricted by poor infrastructure
2. Broadening the economic base by attracting investment
3. Managing conflicts between indiscriminate development and environmental degradation have been caused by poor mining practises leading to soil erosion, silting of rivers (no deep water ports) and deforestation
4. Rural areas are deprived due to not being near the flow of money (66% living in poverty)

OCR A LEVEL GEOGRAPHY (7 decks)

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