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Human Geography > International trade and access to markets > Flashcards

International trade and access to markets Flashcards

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1
Q

Describe the history of production

A
  • 1954, 95% of manufacturing was concentrated in Western Europe, North America and Japan
  • Over time decentralisation occurred due to FDI from TNCs
  • This abled developing countries to take on manufacturing task at a competitive cost; lower land and labour costs and government incentives.
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2
Q

Define global shift

A

The filtering down of the manufacturing industry from developed countries to lower wage economies.

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3
Q

What are the consequences of global shift?

A
  • Deindustrialisation in richer countries

- Loss of jobs in manufacturing sector

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4
Q

What other factors have caused a decline in manufacturing in developed countries?

A
  • Outdated production methods

- Poor management

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5
Q

Give some factors which affect the location choice of manufacturing companies:

A
  • availability of skilled and educated workers
  • government incentives (e.g. tax breaks, enterprise zones)
  • access to larger markets without tariff barriers; trade agreements
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6
Q

What is a free trade area?

A

Trade barriers reduced and trade of goods increased

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7
Q

What is a customs union?

A
  • Countries group together to apply the same tariffs

- Once goods have cleared customs they can freely trade within the union

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8
Q

What is a common market?

A

A group of countries imposing few or no duties on trade with each other and a common tariff on other countries

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9
Q

What are the global advantages of nations joining together as trading entities?

A
  • Improves world peace and reduce conflict
  • Improved global trade
  • Helps members develop their economies
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10
Q

What are the regional advantages of nations joining together as trading entities?

A
  • To compete on a global level
  • Bigger representations in global affairs
  • People seeking work can easily move between countries
  • To share technological advances
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11
Q

What is CAP and what was its aims?

A

Common Agricultural Policy

  • High quality food
  • Affordable food
  • Safe food
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12
Q

Give some disadvantages of trade agreements:

A
  • Loss of sovereignty (decisions are centralised)
  • Loss of financial controls
  • Pressure to adopt central legislation
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13
Q

What is expected to happen as distribution and consumption shifts to the Eastern countries in the future?

A
  • India and China will become a strong trade route
  • More of Asia’s exports will be to other Asian countries
  • Western countries can benefit from the expansion of financial services in Asian countries
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14
Q

What is meant by a comparative advantage?

A

Countries should specialise in providing goods and services they excel at

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15
Q

Give some trade restraint examples:

A
  • Import license, authorising imports from a specific source
  • Import quotas, physical limit of the quantity of goods imported
  • Subsidies, grants given to domestic producers to reduce their costs against imported goods
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16
Q

What is FDI and who does it help?

A

Foreign Direct Investment

Important source of funding for developing countries, making it easier to start economic growth

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17
Q

What are the benefits of trade agreements?

A
  • Reduces costs of trading for businesses
  • Everyone trades fairly, no bans can be implemented
  • Variety of goods for the receiving country
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18
Q

What are the disadvantages of trade agreements?

A
  • Reduces jobs as competition from abroad overrules manufacturing/services providers
  • Small economic benefit
  • Secret negotiations
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19
Q

What is the TPP?

A

Trans-Pacific Partnership

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20
Q

Who’s involved in the TPP?

A

12 countries including;

Canada, Chile, Japan, USA, Mexico, Singapore

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21
Q

Why has the TPP been criticised?

A

Negotiations lack transparency despite holding the status of being one of the most important trade agreements globally

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22
Q

What does the TPP intent to negotiate?

A

As well as traditional trade matters; investments, copyright, patents

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23
Q

What countries compromise Mercosur?

A

Brazil
Argentina
Uruguay
Paraguay

24
Q

Whats the aims of Mercosur?

A

To allow free movement of labour between the members

Allows trade globally

25
Q

What countries compromise the PA ?

+ What is the PA?

A 
- The Pacific Alliance 
Chile
Peru 
Columbia 
Mexico
26
Q

Whats the aims of the PA?

A

Open to making bilateral agreements with other nations

27
Q

What is SDT ?

A

Special and differential Treatment

28
Q

What was the reason for imposing SDT?

A

Protectionist policies excluding many developing countries from trading freely with more developed nations

29
Q

What are the aims of providing SDT:

A
  • Tackle the structural difficulties that characterise LDC’S (low level of income, vulnerability to export prices)
  • Engage in world trade (providing incentives)
  • Promoting faster income growth and development
30
Q

Give some benefits of trade in developing countries:

A
  • Allows workers to diversify their economies
  • Achieve economic takeoff
  • Lift population out of poverty
31
Q

Why may TNC’s operate in more than one country + examples ?

A
  • Escape trade tariffs (Nissan produce cars in Sunderland)
  • To find lowest cost location (Hewlett-Packard in Malaysia)
  • To reach foreign markets (McDonalds)
  • To exploit minerals and resources (BP in Azerbaijan)
32
Q

Give some common characteristics seen in TNC’s:

A
  • Sourcing materials and components at the lowest cost
  • Branding products to make them recognisable
  • Controlling key suppliers
  • Outsourcing of production
33
Q

Where do company headquarters choose to locate?

A

Traditionally in the home country, with sub-headquarters in each continent. TNC’s engage in research and development activities, meaning they locate to centres of higher education (e.g. University research facilities)

34
Q

Where do TNC’s involved in the primary sector often locate?

A

Wherever there are unexploited resources, usually in developing countries

35
Q

Where do TNC’s involved in the secondary sector often locate and why?

A

Manufacturing regions in developing countries because:

  • Labour cost are lower
  • Investment in education making it easier to train workers
  • Work ethic means people are willing to work longer for less
  • Governmental incentives; such as tax free breaks, low business rates
36
Q

Where do TNC’s involved in the tertiary sector often locate?

A
  • Where there are low labour costs
  • Good education
  • Proximity to their markets
37
Q

Define agglomeration

A

When companies in similar industries locate near to each other to gain benefits such as sharing ideas and resources

38
Q

What are the two main categories of agglomeration + explain them:

A
  • Urbanisation economies refers to the benefits that different industries receive from population and infrastructure clusters (e.g a shopping mall)
  • Localisation economics refers to the benefits that firms in the same industry receive by being located close to each other.
39
Q

Define the multiplier effect

A

Where an initial injection of investment capital into an economy creates additional income by; increasing employment, spending and tax revenues.

40
Q

What are the two types of integration + explain them:

A
  • Vertical integration: When the supply chain of the company is owned entirely by the company, giving the TNC control over its supplies and reduces costs.
  • Horizontal integration: When a company diversifies its operation by merging or taking over similar companies at the same stage of production.
41
Q

What is integration?

A

A method used by TNC’s to expand their market by investments, takeovers and merges.

42
Q

Give some benefits of TNC’s for the host country:

A
  • Creates jobs and income
  • Brings new technology
  • Gives workers new skills
43
Q

Give some benefits for the TNC locating in a developing country:

A
  • Lower labour costs
  • Greater access to resources
  • Fewer controls/legislation
44
Q

Give some benefits of TNC’s for the home country:

A
  • Cheaper goods

- Can specialise in financial services and R&D

45
Q

Give some problems of TNC’s for the host country:

A
  • Poor working conditions
  • Exploitation of resources
  • Negative impacts on the environment
46
Q

Give some problems for the TNC locating in a developing country:

A
  • Ethical issues can damage reputation

- Social and environmental conscience

47
Q

Give some problems of TNC’s for the home country:

A
  • Loss of manufacturing jobs
  • De-industrialisation
  • Structural unemployment
48
Q

What is the TTIP and who does it include?

A

Transatlantic Trade and Investement Partnership

A bilateral trade agreement between the EU and the USA

49
Q

What are the aims of TTIP?

A
  • To reduce regulatory trade barriers for big businesses; including food safety laws, environmental legislation and banking regulations
50
Q

What’s the main concerns of TTIP?

A

That it will give more power to TNC’s and threaten public services (e.g. the NHS)

51
Q

What is the G20 group and what countries does it consist of?

A

International forum for the governments and central banks

52
Q

What factors pull investment into a country?

A
  • Plentiful natural resources
  • Large and accessible markets
  • Financial services
53
Q

Describe international trade and its current figures

A

World exports of manufactured goods have increased

54
Q

Describe the patterns of international trade

A
  • Trading and investments used to be heavily concentrated within HIC’s
  • Investments: HIC’s and emerging economies invest in LIC’s
  • Trade: HIC’s largest exporters
    NEE’S becoming large exporters (accounting for 41%
55
Q

What are SEZs?

A

Special Economic Zones

Areas within a country that do not have the same trading regulations as the rest of the nation

56
Q

What factors affect a countries access to markets?

A

Agreements (SEZs and SDT)

Wealth

57
Q

How does wealth impact a countries access to markets?

A

HICs can afford to pay for higher tariffs on exports and imports - allowing them to make profit and receive products

Human Geography (23 decks)

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