Global Trade

Question 1

International trade

Answer 1

Trends in the volume of international trade and investment

Question 2

How has trade changed since 2014

Answer 2

Drastically increased

Question 3

How has global trade changed?

Answer 3

Increased from 40% in 1990 to 60% in 2014

Question 5

Examples of barriers to trade

Answer 5

Trade blocs
Tariffs

Question 6

Protectionist strategies

Answer 6

Import license
Quotas
Subsidies
Embargo’s

Question 7

Advantages of international trade

Answer 7

Increased employment
Fewer domestic monopolies
Purchasing power

Question 8

What is purchasing power?

Answer 8

Increasing trade results in increased competition that lowers prices meaning consumers buy more for money

Question 9

Disadvantages of international trade

Answer 9

Overspecialisation
Product dumping
Exploitative and labour intensive industries
Traditional skills and crafts lost

Question 10

What is comparative advantage?

Answer 10

Countries and services should specialise in providing goods that they excel at producing

Question 11

Umbrella city

Answer 11

70% of umbrellas made in China
In Songxia in Shaoxing
Half a billion umbrellas made annually at low production costs
Good road network and Ningbo port connect to the world

Question 14

WTO

Answer 14

The WTO was set up to increase trade and help resolve trade disputes between member
countries.

Question 15

Protectionism

Answer 15

Some countries limit trade using tariffs and non-tariff barriers to shield their industries from foreign competition

Question 16

What does the world trade organisation (WTO) do?

Answer 16

It sets rules about how countries should trade with each other

Question 17

What are the rules set by the WTO?

Answer 17

1. Countries can’t give another country special access to their market without doing the
   same for every other country in the world. However, there are exceptions e.g. countries
   can give special access to members of their trade bloc.
2. Countries should promote free trade e.g. by removing as many barriers to trade as
   possible
3. Countries should act predictably in their trading e.g. by not raising tariffs on particular products once a deal has been reached.
4. There should be fair competition – one company or country shouldn’t get an unfair advantage over rivals.