international trade and access to markets

Question 1

patterns and volume- trade

Answer 1

• volume of trade increased dramatically since the 1980’s- its value has increased by 8 times
• pattern of global trade is changing- developed countries remain biggest traders but nee’s are catching up
• developing countries share of world merchandise is 41%

Question 2

reasons for more trade

Answer 2

• countries are opening themselves up to international trade by removing trade barriers
• fairtrade is increasing which helps support people in lics

Question 3

trade bloc=

Answer 3

are groups of countries in a trading agreements allowing them to have certain advantages like reduced tariffs or higher quotas- usually between neighbouring countries but also are for industries like oil
example EU free trade within the EU has allowed goods and services to be transported internationally

Question 4

patterns and volume- investment

Answer 4

• distribution of fdi is unequal largest receiver is USA
• countries with natural resources attract fdi and also if they have a large population or a financial service
• volume of fdi has risen dramatically
• patterns of investment have changed- emerging economies invest in lics
• biggest trade link is between europe and asia of 8.8%

Question 5

FDI=

Answer 5

foreign direct investment which is when a person, company or other group spends money in another country in order to generate profit

Question 6

ethical investment=

Answer 6

when a person or company only invests in areas considered socially responsible- companies that cause environmental or humanitarian harm are generally avoided

Question 7

TNC’s-spatial organisation

Answer 7

• HQ’s in LIC’s. its responsible for big decesions like investment and meetings
• research and development in country they are operating from
• manufacturing are concentrated in lic’s due to increased profit

Question 8

TNC’s- production

Answer 8

use global management systems like:

• economies of scale= TNCs have a large revenue so can afford to upscale their production
• global supply chains= production occurs globally
• outsourcing and offshoring

Question 9

TNC’s linkages

Answer 9

-they can create links between countries and companies
-links through FDI=TNC’s can create links by investing in countries which helps provide jobs and contribute to the economy
-links through integration:
vertical integration=taking ownership of part of the supply chain
horizontal integration=taking ownership of another country in a similar industry

Question 10

TNC’s trading and marketing patterns

Answer 10

• majority of TNC’s trade with HIC’s as concentration of consumer goods
• now theres a rapid increase in demand of popular brands in emerging economies
• as TNC’s have lots of revenue they can afford to take advantage of global marketing

Question 11

coffee production

Answer 11

-coffee beans are susceptible to disease, insects and pests and wet humid weather causes disease to spread quicker
MAIN PRODUCERS OF COFFEE= south america, caribean, asia and africa-brazil is largest producer of 20% of coffee biggest consumer is USA
-farmers only get 7-10% of profit

Question 12

coffee production- why dont producers get the profit

Answer 12

• supply and demand= as demand increases so does the price
• high prices are good for consumers but bad for producers
• TNC’s receive profit as they process the bean which adds value
• TNC’s have the power to pick and choose where they buy their coffee so leads to competition as they can cut prices and labour regulations