GS: International Trade And Access To Markets Flashcards
How can the basis of trade be explained
By the theory of comparative advantage; countries specialise in activities for which they are best equipped in terms of resources and technology. A country can then trade surpluses in order to provide the income needed to buy in goods that cannot be produced efficiently, or at all, in the home economy.
When studying this topic what should you consider
When studying these topics, you should consider how international trade and variable access to markets underlies and impacts on people’s lives across the globe. In addition, you should consider how they impact on you life, and influence the way in which you live.
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Define trade
The movement of goods and services from producers to consumers. In geographical terms, it is measured by movement of these items from one country to another.
Define comparative advantage
The principle that countries can benefit from specialising in the production of goods at which they are relatively more efficient or skilled.
In 2013, which groups of nations accounted for trade of goods
In 2013, the top ten trading nations accounted for 52% of global trade in goods. Developing countries accounted for 44%. The total value of exports was US$17.8 trillion
In 2013, which groups of nations accounted for how much of global trade in commercial services
The top ten trading nations accounted for 50% of global trade in commercial services. Developing countries accounted for 34%. The total value of exports of services was US$4.6 trillion.
In 2013, how much of exports of goods were sent to who
52% of exports of goods from developing economies are sent to other developing economies. On the other hand, developed countries sent 30% of their exports to developing countries.
In 2013, what was the trend in trade with least developed countries (LDCs) by both developed and developing countries
It’s increasing, but they are both small in amount.
Tell me what LDC exports amounted to in 2013
LDC exports amounted to US$215 billion. 44% of this was exported to Asia (23% to China), 24% to Europe (20% to the EU) and 12% to North America.
In 2013 what did China become
China became the worlds biggest trader in goods, with imports and exports totalling US$4,159 billion. It recorded a trade surplus of US$259 billion.
In 2013 who was the second biggest trader in goods
The USA was the second biggest trader in goods, with imports and exports totalling US$3,909 billion. The US trade deficit was US$750 billion.
Germany was third in place, with a trade surplus of US$264 billion.
How has the regional share in world exports of commercial services changed in recent years
World exports of commercial services totalled US$4,645 billion. The regional share in world exports of commercial services has changed in recent years. In 2013, Europe’s exports of commercial services accounted for 47% of world receipts, down from 52% in 2005. There were rising exports by other regions, such as Asia, which accounted for 26% of global services exports in 2013. This was driven by increasing commercial services in India, Macao and Thailand.
What does UNCTAD stand for
The UN conference on trade and development
Tell me how FDI is expected to rise
A report by the UN conference on trade and development (UNCTAD) in 2014 showed that inflows of global foreign direct investment (FDI) grew to US$1.45tn in 2013. It is expected to rise to US$1.85 in 2016.
Flows to developing countries reached a record high of US$778 bn, which makes them worth 54% of the worldwide amount. This meant that developing countries took more investment than developed ones, which, with US$566 bn, had a historically low share of 39%
What’s the trend in FDI been to the EU
FDI to the EU began to grow again, with its member countries receiving US$246bn, an increase of 14% on 2012. However, the eu still received less than 30% of what it was getting in its peak year 2007.
What’s the trend been to FDI in America
Although Latin America and the Caribbean saw overall positive growth in FDI inflows, it was mostly due to growth in Central America, despite an overall 6% decline in South America.
In 2013, which country received the most FDI
USA stays as the top country, with US$188 billion investment after growth of 17%
Which five countries received the most FDI in 2013
USA China Russia Hong Kong Brazil
Tell me about trends in FDI outflows in 2013
The report from UNCTAD also looked at the amount spent by companies and other bodies in each country. These are called FDI outflows. Despite a decline of 14.5%, North America (USA and Canada) is the top region of outward investment of US$381 billion. Outward investment from Asia is increasing - FDI outflows from China grew $101 bn in 2013 and is expected to surpass its inflows within 3 years.
Tell me about general differential access to markets
The trading agreements discussed and the various other ways in which countries become involved in the dealings of other countries, whether by trade or aid, or a combination of both (as illustrated by china’s dealings overseas), have impacted the economic and societal well being of the people within those nations.
You should study examples of how differential access to markets impacts nations and people. One example could be at a national level, such as how different areas of Mexico are affected by their trading relationship with the USA. Another could be to examine how individuals can gain access to markets in order to raise their personal living standards. (Examined briefly next)
Tell me about differential access to markets: Mexico and NAFTA
There is huge variation of incomes within Mexico as the country modernises. For example, economic productivity in Nuevo León, a heavily industrialised state close to the US border (capital Monterrey), is at level equivalent to that of South Korea. Here maquiladora are common. In the south of Mexico productivity is close to that of sub Saharan Africa. The country’s industrial clusters devoted to the manufacture of cars, planes, electric goods and electrical equipment - categories that between them account for 2/3s of Mexico’s manufacturing exports, and thus for about 18% of GDP - are largely to be found in a band next to its northern border and in the central states to the south of it. These states account for about 70% of the country’s 120 million population. These figures are largely due to the access to the North American market that the region possesses, resulting from NAFTA.
What does Microfinance refer to
Microfinance refers to a number of different financial products. Inducing: Microcredit Micro savings Micro insurance Payment management
What is microcredit
The provision of small scale loans to the poor, for example by credit unions.
What’s micro savings
For example, voluntary local savings clubs provided by charities.
What’s micro-insurance
Especially for people and businesses not traditionally served by commercial insurance, which can act as a safety net to prevent people from falling back into poverty after, for example, a harvest failure.
What’s payment management
For managing remittance payments sent between individuals. One of the most well known mobile phone based solutions is M-pesa in east Africa.
What does microcredit simply attempt to do
Reduce poverty
How does microcredit attempt to reduce poverty /what are its key characteristics
If often provides small loans for the working capital requirements of the rural poor, especially women
There is minimal risk assessment of borrowers compared with commercial banks.
Security is rarely demanded for the money
Based on the loan repayment history of the members, Microfinance institutions can extend larger loans to the members repeatedly
For many people, who is Microfinance and microcredit essential for
Microfinance and microcredit are essential and produce many benefits for poor and low income households.
Microfinance can also help to unlock a community’s entrepreneurial potential and allow them to access markets for their products.
What are the criticisms of microcredit and Microfinance
This type of money lending is not without its critics. There are sometimes problems in terms of maintaining manageable interest rates, gender inequalities (experts agree that women should be the primary focus), and being able to reach those in most need while still covering operational costs. There are also problems of people defaulting on their loans and the scheme losing its assets.
What’s the traditional view of a TNC
The traditional view of a transnational corporation (TNC) is firm that has the power to coordinate and control operations in more than one country. Such organisations are hierarchal and usually have a recognisable home base incorporating the headquarters and research and development (R&D) arm in developed countries, with centres of production overseas.
Define TNC
Transnational corporation (TNC) is a company that operates in more than one country
Over the last few decades TNCs have developed different forms and have moved into a wide range of activities, list them
Resource extraction
Manufacturing
Services
Tell me about the activity of a TNC: resource extraction
Particularly in the mining and oil and gas industries (for example, BP, Exxon, Royal Dutch Shell and Chevron)
Tell me about the role of TNCs: manufacturing
In high end products such as computers and electronics (Apple) and pharmaceutical (GSK), large volume consumer goods with products such as cigarettes, drinks, foods and cosmetics (BAT, Fosters, Unilever, Kellogg’s, L’Oréal)
Tell me the top 3 largest public TNCs, 2014
ICBC (China)
China construction bank (China)
Agricultural bank of China (China)
