International trade & access to markets Flashcards
Why do most nations trade?
For a comparative advantage by specialising selling products
Why was 20th century trade limited?
Regulations, protectionism and high transport costs
Define barrier to trade
Government-imposed restraint on the flow of international products
Why do barriers of trade exist?
Mostly to protect established/emerging industries that are domestic
Define Import license
Physical licence given by the government to authorise importation
Define Import Quotas
Physical limit on quantity of goods that are imported
Define Subsidies
Grants or allowances for domestic producers - make them more competitive vs northern goods
Define voluntary export restraints
Exporting country to appease importing to stop trade barriers
Define Embargoes
Partial/complete prohibition of trade with a country
Define Trade Restrictions
Import restrictions due to highlighted problems (e.g child labour)
Outline the Nestle controversy
Nestle has an affiliate country using child labour to harvest cacao to make their chocolate - reports caused them to make a change
Define G7 Countries & outline what countries are in the group
Informal group that meet to discuss economic & security issues
UK, France, Germany, Italy, USA, Canada and Japan
Outline the patterns of international trade
Domination of large economic blocs - North America, EU and East Asia
G7 countries = 50% of global trade
Outline the changes in trends for global trade
Emerging economies growing (e.g China largest growth) -> Trans Pacific trade > growth > Trans Atlantic trade
Outline the total value of trade for goods and services in 2013
Merchandise goods = US$18.8 trillion
Services = US$4.6 trillion
Outline 2 forecasts made for the trends in global trade for 2020
- Machinery & transport sector = largest contribution to trade
- Intraregional trade in EU >US$7 trillion
Define Foreign Direct Investment (FDI)
When a company from one country invests in another company in another country
Outline the anagram of OECD
Organisation for Economic Co-operation and Development
Outline the aims of the OECD
Group of countries that help each other reach growth prosperity and sustainability - use analysts in forecast trends
Outline the top recipient of FDI in the 2011 UN Conference on Trade and Development (UNCTAD)
USA $258 bn
Outline the 2 main groups of countries that have a large FDI share fall into (according to the UNCTAD)
- Natural resource development countries (e.g Mongolia)
- Financial business services countries (e.g Hong Kong)
What are the 3 main attractions of FDI?
- Plentiful natural resources
- Large + accessible consumer markets
- Financial services
Define Fair Trade
Social movement - helps producers in developing countries achieve better trading countries & sustainability
How are suppliers in developing countries exploited by buyers?
Buyers (usually TNCs) can force down prices of suppliers because suppliers:
- have little influence
- reliant on income from their goods
