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Human Geography 🌃 > International Trade > Flashcards

International Trade Flashcards

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1
Q

what is international trade?

A

exchange of goods, money and services between countries

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2
Q

general trends of international trade

A

LICs export low value primary goods
- eg raw materials, oil
HICs export high value secondary goods
- eg cars

more than 50% trade in DCs with other DCs

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3
Q

how has the pattern of trade changed?

A

developed countries still have biggest role in trade
- G7 countries = 50% world trade

but many NEEs are becoming more important
increased share in world trade
- eg China, growth in manufacturing
now largest exporter

LICs - increasing role in last decade
eg south to south trade
LeastDCs - exports increased by 31% between 2019 and 2022

rise in fair trade, supports producers in LICs

more trading blocs mean more countries are involved in international trade as barriers are removed

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4
Q

how has the volume of trade changed?

A

globalisation has increased amount of international trade as countries more connected

rely on imports and exports
- manufacture abroad where cheaper and import goods

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5
Q

how has pattern of investment changed?

A

HICs used to invest in HICs
remain largest source of FDI but now invest in NEEs and LICs
- china 3rd largest recipient of FDI

but flows by NEEs increasing
- NEEs are investing more in LICs
eg China in African countries

LICs receiving FDI from HICs and more NEEs

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6
Q

how has volume of investment changed?

A

volume of FDI increased
- 4x between 1996 and 2006

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7
Q

why did most trade happen between developed countries?

A

(however NEEs such as china becoming more important in global trade)

  • more likely to have trade agreements
  • better infrastructure so quicker and easier
  • specialise in high tech good, require money
  • people weather so have higher disposable income
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8
Q

why are emerging economies becoming more important to global trade?

A

lower labour costs - cheaper manufacturing, attracts FDI
= increased exports

experiencing rapid economic growth, demand for more products as income rises
large and growing populations
= more imports

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9
Q

why are less developed countries less involved in international trade?

A

less likely to be well connected with god infrastructure to manufacture and transport goods

lower GDP, lack capital to invest in infrastructure

consumer markets smaller, less disposable income

more likely to suffer from political instability, deters FDI

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10
Q

what do each type of country export?

A

developed countries and emerging economies
- secondary commodities
- manufactured products (adds value)
eg cars

less developed countries
- primary commodities
- raw materials or natural resources (low value)
eg crude oil

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11
Q

how having trade relationships changed?

A

HICs often trade with HICs
- however increased trade with NEEs such as China (increased manufacturing)

LICs often trade raw materials - low value
NEEs have role in manufacturing goods

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12
Q

what is a trading bloc?

A

agreements between governments on trade
- remove barriers (such as quotas and tariffs) between members to promote and manage trade
- increases access to markets

aims
- promote economic integration between members by increasing trade and investment flows
- leads to increased economic growth and development

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13
Q

examples of trading blocs

A

EU
NAFTA

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14
Q

the EU

A

EU - 1956
objective to integrate economy of Europe
though trade and economic growth
make future conflict less likely

  • euro adopted by most countries so trade easier
  • free movement of people within allowed labour to move around
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15
Q

successes of the EU

A

free movement of people

encourages FDI, positive multiplier effect

encourages trade between EU countries

ensure food security in Europe

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16
Q

limitations of trading blocs (eg EU)

A

create dependance on economies
- crisis may affect larger area
eg Mexico suffered due to US as part of NAFTA

make it harder for non member countries to access markets
- face high tariffs and taxes

17
Q

NAFTA

A

trading bloc which means Mexico can trade with the US
improve economic well being in Mexico

but suffered economically during a recession in the US due to reliance on exports to them

18
Q

what is access to markets?

A

how easy it is more countries to trade with each other

HICs have greater access

19
Q

what affects access to markets?

A

wealth
- HICs may put higher tariffs on goods from LICs - reduced access
- HICs can bypass LICs tariffs by opening factories in them - they have the money

trading blocs
- increase access as removes barriers between members
- but non-member countries have to pay higher tariffs - disadvantage

  • can create dependance
20
Q

economic impacts of differential access to markets

A

hard for countries with poor access to trade
- face high tariffs selling abroad
means they can only sell low value raw materials
- low gross national income
- less money to invest in industry - slow economic development

countries with good access - more economic growth
- trade more
- citizens wealthier
- can afford to develop industries

trading blocs increase dependance
- recession in one country effects others

21
Q

social impacts of differential access to markets

A

better market access
- higher income from trade
- money to invest in healthcare and education
- higher pay so higher disposible income
= higher QoL

less access
- lower income from trade
- less money to invest in education and health
- lower pay so lower disposible income
= lower QoL

member of a trading block can increase jobs proving income and therefore better QoL

22
Q

what is a Special Economic Zone?

A

areas with different trade and investment rules eg lower taxes
aims to increase volume of trade with NEEs and LICs
but keep barriers

23
Q

what is special and differential treatment?

A

formed by WTO
gives LICs greater access to markets
- allows them to bypass HICs tariffs
- profits allow them to invest in new industries = economic growth

24
Q

how does trade and market access affect peoples lives?

A

trade benefits HICs more - more profit - higher pay

trade and access means wide range of good available in HICs - increased standard of living

25
Q

what is free trade?

A

when international trade left to natural course
without government imposing quotas (restrictions on numbers) or tariffs (taxes on imports)

26
Q

how does differential access affect economic wellbeing?

A

trading bloc increases potential for trade (better access)
eg NAFTA mean Mexico and trade with US
however recession have knock on impacts of ember countries
eg Mexico

less access means less trade so less economic growth in a country

special and differential treatment aims to improve access
- promote income and growth through trade

27
Q

What effects trading relationships

A

Location (distance)
Trade agreements

28
Q

ways of increasing trade

A

trading blocs
special economic zones
special and differential treatment

29
Q

what is the WTO?

A

set up to:
- increase trade
- settle trade disputes
increase economic growth and development = improve standards of living

rules:
- countries should promote free trade (removing barriers)
- act predictably, not increase tariffs suddenly

gives countries SDT
- allows LICs better access = economic growth
eg everything but arms - allows LICs to export all goods to EU without tariffs (but weapons)

30
Q

example of SDT

A

Everything But Arms

allows LICs to export goods into EU without tariffs or quotas (except weapons)
= increased access to markets and therefore economic development in LICs

31
Q

benefits of international trade

A

+ access to goods globally
eg bananas in UK

+ increased employment, more production for exports = multiplier effect

+ creates economies of scale - countries can specialise in narrower range of goods, can be made cheaper and in higher volumes = more efficient

+ increased stability - dependance on other countries for resources

32
Q

issues with international trade

A
  • environmental issues - increased transport needed = more pollution
  • over-specialisation - if demand falls then need to shift to other products, but can be difficult as may not be able to diversify, due to specialising
  • decline of local industries - goods imported from cheaper abroad, less demand within the country
  • deindustrialisation in developed countries
  • over reliance = knock on impacts of recessions
33
Q

global supply chains

A

different parts of business in different countries
for TNCs

allows them economic of scale

take advantage of lower labour costs, environmental laws, resources available and local expertise

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