International Trade & Access to Markets Flashcards
What is International Trade?
the exchange of goods and services across international borders. Inbound trade is described as “IMPORTS”. Outbound trade is described as “EXPORTS”
What are the flows of labour?
Labour markets are not as free flowing as financial markets because of restrictions on Immigration. Movement of migrants grossing international borders has increased in the last 25 years usually from LDE to HDE usually by educated people with financial means to seek better employment opportunities. Eg. Migrants from South Asia, Africa and Latin America to North America and Europe or the gulf states where the construction boom has provided work opportunities.
Between 2005-2010 5 million workers moved from South Asia to West Asia.
What is the flow of products
Raw materials to interm suppliers to manufacturers
to distributors to retailers to customers
What is the flow of services?
Any service that does not involve the production of goods:
High level services - services to businesses such as finance investment or advertising;
Low level services - services to consumers such as banking, travel and tourism or communication services
Why is information flow important?
It leads to the expansion of knowledge intensive goods and services which use highly skilled and educated labour such as the pharmaceutical industry, computer technology, international business, law and accounting industries.All these industries need the exchange of ideas and flow of expertise to flourish
What is containerisation?
Large standardised-size steel containers used to transport goods from lorries, to ships to warehouses ensuring safe and easy transportation of goods.
What is Protectionism?
Government policy which imposes restrictions on trade in goods and services with other countries usually in order to protect home-based industries from foreign competition.
What are Tariffs?
Taxes or duties placed on imported goods with the intention of making them more expensive for consumers so that they do not sell at a lower price than home-based goods.
The WTO encourages lower tarrifs to encourage cross-border trade
What are Footloose Services?
Any service that does not involve the production of goods:
High level services - services to businesses such as finance investment or advertising;
Low level services - services to consumers such as banking, travel and tourism or communication services
Where were the 3 traditional centres of global industrial and financial control?
London, New York, Tokyo
What financial institution is centred in Frankfurt?
The European Central Bank of the EU
What other financial centres have grown in the last 50 years?
Toronto, Zurich, Hong Kong, Singapore, Seoul and Shanghai
What are Trade Agreements?
Since the 1950s trade agreements have created free trade between certain member countries. For example European countries are members of the EU (European Union). UK was formerly a member of the EU but not the Eurozone where there is agreement to a common currency the Euro.
Since the 1950s trade agreements have created free trade between certain member countries. For example European countries are members of the EU (European Union). UK was formerly a member of the EU but not the Eurozone where there is agreement to a common currency the Euro.
On a global scale Trade Agreements :
- improve global peace and security and reduce conflict
- increase global trade and cooperation on trade issues
- help members develop their economies and standard of living
On a regional scale Trade Agreements :
- to compete on a global level with other trading entities;
- have bigger representation in world affairs
- to allow freedom of movement of trade
- to allow people seeking work to move between countries more easily
- to negotiate trade advantages
- the possibility of developing a common currency to prevent currency fluctuations
- to support particular sectors of a national economy such as agriculture within the EU
- to share technological advantages
- to raise standards in healthcare
- to spread democracy / human rights
What are the advantages of Trade Agreements?
On a global scale Trade Agreements :
1. improve global peace and security and reduce conflict
2. increase global trade and cooperation on trade issues
3. help members develop their economies and standard of living
On a regional scale Trade Agreements :
1. to compete on a global level with other trading entities;
2. have bigger representation in world affairs
3. to allow freedom of movement of trade
4. to allow people seeking work to move between countries more easily
5. to negotiate trade advantages
6. the possibility of developing a common currency to prevent currency fluctuations
7. to support particular sectors of a national economy such as agriculture within the EU
8. to share technological advantages
9. to raise standards in healthcare
10. to spread democracy / human rights
What are the disadvantages of Trade Agreements?
- Some loss of sovereignty as decisions centralised
- some loss of financial controls to a central authority such as a bank (eg the European Central Bank - which overseas monetary policy in the Eurozone)
- pressure to adopt central legislation (for example in Europe Bosman ruling on football transfers, food standards and labeling
- certain economic sectors are damaged by having to share resources (for example UK sharing fishing grounds)
Global Financial system is largely facilitated by two organisations - what are they and when were they established?
World Bank & International Monetary Fund (IMF)
World Bank promotes economic development in developing countries
Both were established at the end of the second World War to promote financial stability and steady the global economy
