International Trade Flashcards
Describe recent trends in international trade
An increase of 8x
NEEs e.g. China are slowly catching up on HICs trade level
More counties are removing barriers to trade
More trading blocks
More fairtrade
Describe the global trends in investment in recent years
More FDI
ethical investment is increasing
NEEs are seen to be investing more in LICs
Who are the world trade organisation?
The WTO govern the choices around trade
A country cannot pick and choose countries to trade with except when in trading blocs
Promotes free trade
States countries should be more predictable in their trade
Describe trading blocs,
Why do they arise?
Associations between countries and different governments that have removed trade blocs from one and other, whilst placing trade blocs on others
They arise because of geographical proximity e.g. EU or ASEAN
Or they may be counties with their major industry the same e.g. OPEC who aim to standardise global oil prices
Why do HICs have greater access to markets?
They can put tariffs in LIC goods
Invest within LICs to avoid tarrifs
LICs are dependent on IMF which forces them to remove trade barriers
HICs are more often on trading blocs
Describe the “trade hierarchy”
Lics trade in raw materials
NEEs trade in manufacture goods
HICs trade in complex technology
Describe special and differential treatment what are the pros and cons? Give an example
WTO forms SDTs which allow LICs to bypass tarrifs put in place by HICs,
improves market access for LICS promoting development
But negative effects on HICs as prices become lower
For example the everything but arms agreement in 2001 (EU)
What are the economic impacts of global trade?
Hard for LICS to create new industry as often undercut by TNCs
Become very dependant on low value primary goods, these goods are very vulnerable to price fluctuations hence the LIC is more likely to face recession
HICs become wealthier
What are the social impacts of international trade
HIC citizens have greater amounts of disposable income
LICS cant afford as much health care or education
Sweat shops in LICS due to TNCs
The global interdependence of trade can lead to _____________ such as _________
Recession such as the 2008 financial crisis
