International Trade

Question 1

Always state visibile or invisible trade: What do Spain specialise in (in terms of services)?

Answer 1

Tourism

Question 2

1980-2010 saw the highest growth in what?

Answer 2

Trade

Question 3

Who are the largest importers and or exporters? Give value of Chinas exports 2013

Answer 3

China are largest exporters (US 2 trillion) and 2nd largest importer. Their growth has slowed since 2010 which has impacted global economy as a whole (cooling off).
US are largest importer.

Question 4

How did China economic slowdown of steel impact UK and rest of world?

Answer 4

They were able to dump at low prices meaning other industries collapsed.

Question 5

Describe FDI patterns in HICs vs LICS/NEES

Answer 5

Reducing in HICs increasing in LICs/NEES

Question 6

Describe HDE trade specifically UK and Germany separately

Answer 6

-UK is dominated by services (almost 4/5 of GDP from trade in services).
-In high-tech manufacturing (not mass production of basic items) Germany thrive.

Question 7

Describe EMEs/NEEs such as BRICS or MINT, why they’ve grown and desrbie India and China specifically.

Answer 7

-Their share of world trade increasing due to industrialisation/economic growth.
Eg India call centres and China “workshops of the world.”
More intra-regional trade with EMEs.

Question 8

Describe LDEs in terms of trade

Answer 8

-Most trade comprised of commodities (primary products, income inelastic demand or negative).
-Conflicts/weak governance (failed states) can often deter FDI.

Question 9

Describe HDE and HDE trade

Answer 9

More than half of all world trade. Lots of affluent customers.

Question 10

Describe outsourcing of Levis in 1980s

Answer 10

-HQs in San Francisco. Closed many US plants. 2019, 99% of jeans not made in US but rather in Europe/Asia. Still has an American Cowboy brand. Made possible by reduced costs of manufacturing/labour (eg National Insurnace/pension lax laws).

Question 11

Why re-shore (don’t say what you’ve stated in business already)?

Answer 11

-Less proximity to hazards (synoptic).
-Political eg Trump said it was unpatriotic to offshore and leave host country with less jobs.

Question 12

Describe patterns of FDI: Give example of Fender guitars

Answer 12

-Some invest where it’s cheapest, irrespective of location.
-Some opt for neighbouring countries. Eg US brand Fender guitars. Make in Mexico (close) and USMCA (US, Mexico and Canada trade agreement) means no import taxes.

Question 13

How much of merchandise sales come from developing countries?

Answer 13

40

Question 14

What are sovereign-wealth funds? Describe China and Qatar

Answer 14

-Government-owned investment funds and banks, associated with countries like China investing in, for instnace, Qatar (large rev from oil).

Question 15

Trade between HDEs and EMEs

Answer 15

-Iphones made in China exported to developed countries. Also cheaper goods for the high-street consumer.
-Apple shareholders in developed benefit from this.
-Tata, an Indian company, owns Jaguar Land Rover in coventry. Helps TNCs from EMEs to boost sales.
-Further, Tata steel provide jos for 30k in Wales (mutually reliant).

Question 16

HDEs and LDEs

Answer 16

-Tesc source many goods from LDEs such as Kenya.
-QoL can be poor for farmers in LDEs (if not fairtrade).
-Tariff barriers for LDEs not in trading blocs

Question 17

EES and LDEs: Chiba and Ethiopia

Answer 17

-Some Chinese companies relocated to Ethiopia due to costs of labour rising meaning Ethipoia has diversified from raw materials to merchanidse too.
-Ethiopia, part of Silk Road/Belt initiative and SWF (sovereign wealth fund), increased GDP.
-China also funds healthcare for long-run growth.

Question 18

What’s a trade bloc? (Often regional)

Answer 18

A trade bloc is a type of intergovernmental agreement, , where barriers to trade are reduced or eliminated among the participating states. RTAs increasing. Helps negotiate due to unequal power with globalisation. Trade agreements promote trade with otehr nations.

Question 19

Describe EU and purpose

Answer 19

The EU has a unique set up that allows for both regional governance as well as economic cooperation. Founded in the years after WW2, its origins were based upon once simple principle ​
‘countries who trade with each other (and thereby become economically interdependent) are less likely to be in conflict
Legally binding treaties govern all member countries​
A common currency for 175 million citizens ​
EU policies cover all aspects of out lives from environment to human rights

Question 20

Describe OPEC

Answer 20

Try to fix a fair price of oil (a legal cartel)

Question 21

Describe USMCA (previously NAFTA)

Answer 21

Trade bloc of US, Canada and Mexico. Rectified issues with changing economic environemnt eg stricter env restrictions.

Question 22

Describe Brexit impacts on UK and what was happening prior to this (Nissan TNC)

Answer 22

-Tariff-free meaning cars can be exported with few additional costs. UK used to be a TNC HQ for car manufacturers. Provided jobs eg Nissan.
-Since, uncertainty has been caused. Nissan pledged to remain but long-term manufacturing is a cause of concern.

Question 23

Negative impact of primary product farming

Answer 23

Farmers could exploited/exposed to pesticides bad for lon-run health.

Question 24

Issues with manufacturing economies

Answer 24

Hard to monitor conditions of all suppliers for vertically integrated firm.
Collapse of Rana Plaza Dhaka, 2013, killed over 1k workers.

Question 25

Impacts of Covid

Answer 25

-Global economy shrunk by 4% 2020 - worst since 1930s Great Depression.
-Tourist industries, abroad, hit hard. More staycations benefitting the domestic economy to some extent.
-Personal Protective Equipment demand and China benefitted.
-Information flows grew by 50% 2020 - eg Netflix increased demand.

Question 26

Describe Greece joining EU (multigovernmenatl organisation)

Answer 26

In 2015, Greece was in 4 billion euros of debt, including 3 billion to the EU Central bank. . It was lending money to keep afloat, in some way knowing that it would never be able to pay it back with interest on top.​
Greece applied to join the EU in 1975 but were rejected as the EU believed it would ‘pose serious problems for both Greece and the EU’ and that they needed substantial economic reform before they could be considered for membership (this took 6 years). ​
With the new influx of lent money from the EU – Greece spent big on it’s public sector – this was unsustainable. Part of the economic revamp was covered by raising taxes but a long history of tax evasion remained 2008 global recession hit Greece hard.
Greece was locked into the common currency in the eurozone – if it wasn’t, it could have just lowered the value of its own currency to compete in global trade. However, in order to increase trade efficiency and not take the financial hit, unemployment was forced upon thousands.
An influx of unskilled migrants has not helped the situation. an EU programme was put in place to stem the flow – against the protests of UNHCR (UN branch for Refugee rights)

Question 27

Benefits for Greece in Eu.
Drawbacks

Answer 27

-Greece imports lots of essential foodstuffs/oil.
-But a free Greece could mean there is less red tape with trade, take advantage of its Geographical position to trade with Middle East, could control exchange rate and increased imports may be negated by impacts of growth.

Question 28

What are bilateral trade agreements?
Multilateral?

Answer 28

Between 2 countries.
Multiple eg host countries to IMF to LDEs.

Question 29

Specialisation - Songxia City, China

Answer 29

China has a history with the Umbrella – it is believed the first umbrellas were invented there and then transported along the Ancient Silk Road to Europe. Half a billion umbrellas are made here annually Comparative advantages here include:
Specialisation – They make umbrellas of all varieties.
Access to domestic and international markets – well positioned near the coast and main roads to access all of
Local government support – umbrella companies are incentivised by reduced taxes and preferential trade policies for all parts of the supply chain.

Question 30

Nigeria Oil: Primary Product Dependency. What’s Dutch Disease

Answer 30

Nigeria has bountiful reserves of oil (36 billion barrels worth) and so like with most oil rich countries – you would assume wealth and prosperity. Nigeria joined OPEC in 1971 and this furthered their reliance on oil for national income generation. 80% of GDP.
Traditional industries are on the decline as more seek work in the prosperous oil sector
Immense rural to urban migration has put pressure on urban areas.
Due to lack of expertise in Nigeria, oil giants like Shell can dominate the supply chain with little regard for the local people or environment.Oil spills in Niger Delta.
Dutch Disease: Increase in revenue from exports causes currency to appreciate leading to less price-competitive exports.

Question 31

Describe 2 drawbacks of unequal access to markets

Answer 31

-Kenya struggle to access EU without facing tariffs on their exports. Leads to poor QoL etc
-Isolated rural regions in affluent regions may struggle to transport to higher-income areas.

Question 32

Evaluate the reduction in global inequality

Answer 32

Evidence suggests that this gap is decreasing between rich and poor countries but the gap within countries is widening as the wealthier residents are able to take more advantage of changes in education, technology and labour demands.

Question 33

Inequality in China

Answer 33

Rural vs urban

Question 34

Subsahsran Africa

Answer 34

Struggling/lagging behind