GS&GG: Differential Access to Markets Flashcards
What are the causes of poor access to markets?
Lack of access to trade blocs = limited trade
Lack of access to trade agreements
What are 4 economic impacts of poor market access?
- Lack of development of manufacturing industries - as high tariffs when trying to sell abroad mean products are uncompetitive = primary product dependency
- Lack of industrial development restricts multiplier effect - as no supporting industries
- Reduces attractiveness to FDI from TNCs
- Fewer employment opportunities as growth in all industrial sectors is limited = limiting size of domestic market and economic growth
An example of a country that has poor market access?
List 2 economic impacts of this.
Sierra Leone:
- Manufacturing only contributes to 27% of GDP
- 70% under 25s are unemployed
What are 2 social impacts of poor market access?
- Lack of employment opportunities = lack of disposable income/lower standard of living
- Lack of higher paid jobs/manufacturing = less tax income for investing in health/education = greater inequality
How has the WTO created preferential access to markets for LDCs?
Creation of special and differential treatment
What is special and differential treatment?
Special provision to give developing countries special rights and the ability for developed countries to treat developing countries more favourably
Give an example of a special and differential treatment policy:
‘Everything But Arms’ - EU
Accepts goods from LDCs on an import-tax reduced, quota free basis
What is a strength of special and differential treatment?
What is a weakness of special and differential treatment?
+ Promotes economic growth in LDCs = gives better access to markets = increasing their competitiveness in the markets of HICs
- Concern in HICs as non-reciprocal = may allow cheap imports to flood in = deindustrialisation and higher unemployment in HICs
