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Geography - Global Governance > International trade and access to markets > Flashcards

International trade and access to markets Flashcards

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1
Q

What is the theory behind comparative advantage?

A

It suggests that countries should specialise in proving goods and services that they excel at producing, which they can then trade for things they aren’t as good at producing

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2
Q

What limits comparative advantage?

A

Trade barriers - transport costs

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3
Q

What should comparative advantage allow?

A

Theoretically, production should increase nationally and globally through free trade between countries

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4
Q

What is a trade barrier?

A

Self-imposed government restraint on the flow of international goods or services

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5
Q

What is an import license?

A

This is a license issued by a national government authorising the importation of food from a specific source

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6
Q

What is an Import quota?

A

These set a physical limit on the quantity of goods than can be imported into the country

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7
Q

What is a subsidy?

A

These are grants or allowances usually awarded to domestic producers (producers within countries) to reduce their costs and make them more competitive against imported goods

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8
Q

What different forms can tariffs take?

A

Tariff form, or free trade

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9
Q

What is a tariff?

A

Tax on imports

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10
Q

What is free trade?

A

Eroded protectionism

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11
Q

What are the barriers to trade?

A

Import licenses
Import quota
Subsidies

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12
Q

What are voluntary export restraints?

A

Diplomatic strategy

Offered by exporting countries to appease the importing country

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13
Q

Why are voluntary export restraints applied?

A

To deter the importing country from using trade barriers

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14
Q

What are embargoes?

A

Partial or complete prohibitions of commerce and trade with a particular country

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15
Q

Why do people enforce embargoes?

A

For political reasons, usually to damage another countries economy by restricting the goods they re allowed

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16
Q

What are trade restrictions?

A

Types of import restrictions, can be technical or regulatory

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17
Q

Why are trade restrictions enforced?

A

To ensure the products are of a certain quality or standard

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18
Q

What is an example of a trade restriction?

A

The EU does not import goods that are knowingly produced using child labour

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19
Q

What happened at the end of the 20th century?

A

The emergence of free markets

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20
Q

What did the emergence of free markets intend?

A

Push for the removal of trade barriers

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21
Q

What is the GATT?

A

Global trade framework was strengthened by the
General agreement on tariffs and trade in 1947
Established after ww2, to set regulations on trade around the world

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22
Q

What was the GATT replaced by in 1995?

A

The WTO

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23
Q

What is the aim of the WTO?

A

Create free trade across the world

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24
Q

How successful has the WTO been in comparison to the GATT?

A

Average trade tariffs have shrunk to a 10th of there level when the GATT began operating in 1947

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25
Q

How much trade does the USA, Germany and Japan account for?

A

25% of global trade

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26
Q

How much trade does the rest of the G7 group account for? (UK, Canada, Italy and France)

A

Nearly 50% of global trade

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27
Q

What is taking place more recently which opposes threat on the dominance the G7 countries?

A

NEE - account for a growing share as trade alliances are growing (China especially)

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28
Q

Which country accounts for the largest growth of global trade?

A

China

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29
Q

What is the 2020 forecast for world trade goods?

A

$35 trillion

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30
Q

What is the 2020 forecast for world trade services?

A

$6 trillion

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31
Q

What is the 2020 forecast for inter-regional trade within Europe?

A

$7 trillion

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32
Q

What is the 2020 forecast for inter-regional trade within Asia?

A

$5 trillion

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33
Q

Which country will be the most important market in relation to the Sub Saharas exports?

A

Europe (they will be the consumers for exports from Africa)

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34
Q

What is FDI?

A

An important source of funding in all countries especially LIC - other countries injecting money into another country - important for economic growth

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35
Q

How much FDI flows in countries all around the world?

A

More than $1 trillion - not equally shared

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36
Q

Who are the top recipients of FDI?

A 
USA
China
Belgium 
Hong Kong
Brazil 
Australia 
Singapore
Russia
France
Canada
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37
Q

What factors influence the amount of FDI a country will get?

A

The natural resources they have - eg forest, oil and water
Population size
Size of economic market

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38
Q

Why does Brazil get a lot of FDI?

A

They have the Amazon Rainforest

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39
Q

Why does Canada get a lot of FDI?

A

Has a lot of wood

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40
Q

Why does China get a lot of FDI?

A

Large population - large workforce is attractive

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41
Q

What is the goal of fair trade?

A

Help producers in developing countries achieve better trading conditions and promote sustainability
Help producers not be taken advantage of
Help smaller agricultural farmers gain more influence and power to negotiate better deals with bigger companies

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42
Q

What is fair trade usually related too?

A

Agricultural based products like coffee, handcraft and valuable minerals like diamonds and gold found in LIC

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43
Q

What is the difference between fair trade and free trade?

A

Free trade is the removal of trade barriers, whereas fair trade is a process of helping small scale producers gain fair trading conditions and sustainability

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44
Q

What is ethical investment?

A

Type of ethical consumerism - respecting human rights when buying things

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45
Q

What does ethical investment involve?

A

Investor making a choice based on companies activities

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46
Q

How popular are bananas?

A

One of the five most consumed fruits on the planet.

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47
Q

Who dominates the export of Bananas?

A

Mainly Latin America but also Caribbean countries

48
Q

How much Banans do Latin America export and the Caribbean countries export?

A

13 million tonnes

49
Q

Who are the leading producers of Bananas?

A

Ecuador

50
Q

How much Bananas do Ecuador export?

A

6 million tonnes

51
Q

How much of the price paid for Bananas stays in the ‘richer’ north?

A

90%

52
Q

Who are the leading importers of banana?

A

The USA

53
Q

How much bananas do the USA import?

A

4 million tonnes

54
Q

Who are the leading ‘munchers’ of bananas?

A

India

55
Q

How much bananas do the India ‘munch’?

A

27 million

56
Q

In the past, how much of the banana trade was dominated by just four large TNCs?

A

80%

57
Q

What are the four large TNCs that used to dominate banana trade?

A

Del Monte, Chiquita, Fyffes, Dole

58
Q

How have the organisations of banana trade changed in recent years?

A

TNCs have freed themselves of direct ownership of plantations, in favour of guaranteed supply contracts with medium and large scale producers

59
Q

How is banana trade increasing for the worst?

A

Retailers in the grocery sector in importing countries are increasingly dominating the supply chain - suppliers have little option but to accept conditions such as low prices, discounts and delayed payments or otherwise risk being taken from the supplier list.

60
Q

How is the banana trade bad for the environment?

A

The Banana industry has the largest agrochemical input into the environment

61
Q

How much waste does the Banana trade produce?

A

For every one tonne of bananas produced there are tow tonnes of waste

62
Q

What are the four main things affected because of the Banana trade?

A

Deforestation, waste, soil fertility, and loss of biodiversity (especially aquatic life as pollutants run into water courses)

63
Q

How can we use bananas to explain trade wars?

A

Bananas were the subject of one of the longest trade disputes, lasting 20 years

64
Q

Where did the trade war of Banana begin?

A

1975 the EU countries negotiated a trade agreement called the Lomé Convention with 71 African, Caribbean and Pacific countries, many of whom were banana producers.

65
Q

What was the Lome convention?

A

The banana producers were given SDT’s with preferential tariff-free import quotas to supply EU markets – aim to develop independently without having overseas aid, but also protect the smaller, family-run farms in the Caribbean and Africa from large Latin American producers, whose bananas were produced more cheaply on mechanised plantations

66
Q

How much of the Eu banana market comes from Latin America?

A

75%

67
Q

What happened in 1992 in relation to the trade war?

A

The US and several Latin American countries filed a complain to WTO that the EU practice was unfair

68
Q

Why was the EU trade agreement deemed unfair by Latin America?

A

The EU were still putting tariffs and taxes on their imports, reducing their access to one of the world’s biggest market for bananas

69
Q

When did the WTO finally rule against the Lome Convention?

A

1997

70
Q

Did the war continue after 1997?

A

Yes

71
Q

Why did the trade war continue even after the WTO ruled against the Lome Convention?

A

The Eu proposals did no satisfy the larger, Latin American producers.

72
Q

What happened as the trade war continued?

A

The US government retaliated under pressure from the TNCS (mainly Chiquita) and imposed WTO- approved sanctions on a range of EU products.

73
Q

When was a compromise of the banana trade war reached?

A

In 2009 when the EU agreed to gradually reduce tariffs of Latin American bananas

74
Q

What is Apple Inc?

A

A transnational corporation

75
Q

Where are Apple’s headquarters?

A

In Northern California

76
Q

When did Apple Inc start up?

A

In 1976

77
Q

By value, how successful is Apple?

A

Number one global brand by value - US$145 billion

78
Q

How many employees does Apple have?

A

98,000

79
Q

How many retail stores does Apple have?

A

453

80
Q

How many of Apple’s 453 stores are in Europe and the Middle East?

A

110

81
Q

How many of Apple’s 453 stores are in China?

A

25

82
Q

In 2014, what was Apple?

A

Eleventh largest TNC with a total global assets of US$207 billion

83
Q

Why is apple so successful?

A 
Stylish and well-designed products
Slick marketing and branding
Innovative products 
Focus on highly bible devices 
Selling ancillary products via the internet
84
Q

Where are Apple’s data centres?

A

x4 in Califorina (including their headquarters and research and design centre), x1 North Carolina,

85
Q

Where are Apple’s European headquarters?

A

In Cork

86
Q

Where does the assembly of Apple’s main products take place?

A

Outsourced to Foxconn - main production base is in Foxconn City - Shenzhen

87
Q

Why did Apple choose to base the production in China?

A

Large source of highly skilled, hard-working but low paid workers

88
Q

What is an example of a free trade agreement?

A

NAFTA - The North American Trade Agreement

89
Q

What are NAFTA’s main aims?

A

Gradual elimination of all trade barriers
Promotion of economic competition between members
Increased investment opportunities

90
Q

When did trade between member countries triple (NAFTA)?

A

1993-2007

91
Q

What grew in the USA as a result of NAFTA?

A

USA

92
Q

What has Mexico become since NAFTA?

A

America’s second largest market for exports

93
Q

How many jobs has NAFTA produced in manufacturing?

A

8 million

94
Q

What has closed as a result of NAFTA?

A

Canadian companies

95
Q

Why have some Canadian companies closed as a result of NAFTA?

A

Competition from lower-cost firms

96
Q

What has the move of US firms to Mexico resulted in?

A

Job losses

97
Q

Why has Mexico got the potential to be exploited?

A

It’s natural resources and less stringent pollution laws

98
Q

What is the main goal of free trade?

A

Increase nations’ economic growth

99
Q

What is the main goal of fair-trade?

A

Empower marginalised people and improve the quality of their lives

100
Q

What does free trade focus on?

A

Trade policies between countries

101
Q

What does free trade focus on?

A

Commerce among individuals and businesses

102
Q

Who does free trade primarily benefits?

A

MNCs

103
Q

Who does fair trade primarily benefits?

A

Vulnerable farmers

104
Q

What are the critics of free trade?

A

Free trade is punishing marginalised people and environment

105
Q

What are the critics of fair-trade?

A

Interfere with free market, too small scale for impact

106
Q

What are the major actions of free trade?

A

Countries lower tariffs, quotas, labour and environmental standards

107
Q

What are the major actions of fair trade?

A

Businesses offer producers favourable financing, long-term relationships, minimum prices and higher labour standards

108
Q

Who are the key advocate organisations in fair trade?

A

Fairtrade labelling organisations International

World Fair Trade Organisations

109
Q

Who are the key advocate organisations in free trade?

A

WTO
WB
IMF

110
Q

What are the economic impacts of globalisation?

A

Free movement of labour - pressure on housing and social services
Increased investment
Free trade can harm developing countries as they cannot compete with developed nations
Free trade - lower price for consumers

111
Q

What are the socio-cultural impacts of globalisation?

A

Global products are standardised - less diversity
Greater share of ideas, lifestyles and traditions
Increased awareness of global news - climate change

112
Q

What are the environmental impacts of globalisation?

A

Transport of goods - greenhouse has
TNCs outsource where environmental standards are less strict
Greater movement leads to the spread of invasive species

113
Q

What is an example of offshoring?

A

Dyson

114
Q

How has Dyson offshored?

A

He used to make all the products in the UK, but had to move to Malaysia because their company couldn’t compete with cheap labour markets

115
Q

What did Dyson say?

A

“It’s been an agonising decision”

116
Q

How much is office rent in the uk?

A

£114 per square metre per year

117
Q

How much is office rent in Malaysia?

A

£38 per square metre per year

Geography - Global Governance (7 decks)

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