International Trade and Access to Markets Flashcards
Define Free market
An area or group of countries that trade without taxes or tariffs
What are the G7 countries
Top 7 richest countries in the world who meet as a group to discuss world economic/political issues
Give the 4 top exporters in order
1) China
2) USA
3) Germany
4) Japan
Give the 4 top importers ranked
1) USA
2) China
3) Germany
4) Japan
What is FDI
Direct investment from overseas, and can be in the form of financial collaboration, capital markets and joint ventures.
Give 5 factors that encourage FDI
Prevalence of natural resources Size of their markets SIze of population Access to trade links Financial services Cost of set up
EU has the world’s…largest population
3rd
Give the pros of the EU
Free movement of goods
Free movement of people (tourism + workers)
Poorer countries have become wealthier by receiving EU aid
Give the cons of the EU
Disagreement over the single currency
Conflict over fishing quotas
East and West economic divide
Money wasted through the administration
What percentage of tariffs are eliminated from the Trans-Atlantic Partnership
98%
In 2015, China overtook the USA as the largest………….in the world
But without…China trails behind the USA
Economy
PPP
Is China appealing to investors
YES
FDI rose by 11% in the first few months of 2015
Why has China grown as an emerging economy
Large FDI
Huge working population that is increasingly hard-working
Western-friendly market economy, allowing FDI
Moving into a more high-tech industry, away from the previous sweatshops
Large increase in urbanisation
What is differential access to markets
1971 - aims to provide the least developed among the developing countries with special support measures to overcome specific disadvantages, enabling them to:
- Tackle the structural handicaps (low income, the concentration of primary export goods)
- Engage in world trade in more adventurous levels
- promote faster income growth and development
Why was differential access to markets needed in the 20th C
A growing number of newly independent nations following decolonisation.
Danger that protectionist policies would exclude many developing countries from trading freely with more developed nations
Give the problems of differential access to markets
- Not all countries listed as LEDC’s are part of WTO
- Some measures have not been tailored to the recipient countries in LEDC’s
What is a recession
A period of temporary economic decline in which trade and industrial activity are reduced. This means trading is less profitable and is reduced
What is a political instability
Defined as the potential for sudden + significant change in leadership, policies or commodities of a country
Give 8 barriers to trade
Recession Political instability Corrupt government Lack of natural resources to exploit Lack of skilled workforce Poor healthcare Natural disasters Tariffs Quotas
How does a lack of FDI prevent trade
Poorer countries cannot develop their industry in order to produce new items to trade
Define protectionism
The economic policy of restricting trade between countries through methods such as tariffs on imported goods, restrictive quotas and a variety of other goverment regulations - with the aim of shielding domestic industries + economies from foreign competitors
What is Fairtrade, when was it founded
About better prices, decent working conditions, local sustainability, fair trade terms for farmers + workers in the developing world.
1992 - UK based company
How many farmers have benefited from fairtrade
1.5 million
Give the conditions of fairtrade
- No child labour
- Fair wages
- Good working hours
- Good Health and safety
- Good environmental policies
Give the positive aspects of Fair Trade
- Excellent wage system, allowing equal job opportunities
- Small businesses become internationally competitive
- Discriinatio is banned
- Child labour reduced
- Social conditions dramatically improve
Comunity benefits extend to more than just basic needs
Give the negative aspects of Fairtrade
- Natural limits to its success limited to the local population
- Product choice is greatly reduced
- Buyers aren’t generally attracted to the Fairtrade model
- Very high fees
Give some advantages of a TNC
(TNC’s)
- Creates jobs, trains workforce, develops skills
- Bring capital and modern technology which the country does not have
- Improve local infrastructure (roads, airports, energy supply)
- Taxes paid to the government can be invested in infrastructure
- Multiplier effect, attract service sector jobs and economic development of the region
- Some goods can be imported, increase trade
Give some economic disadvantages of TNC’s
- Profits made by the TNC are paid to shareholders mainly in richer countries. Profits not reinvested in poor countries
- Lower wages in factories and farms than richer countries
- Tax avoidance
- Jobs aren’t secure, key jobs go to outsiders
- Governments have no say over TNC’s
Give 2 social disadvantages of TNC’s
- People work long hours and poor working conditions
- Farming and manufacture may cause environmental damage
India is the worlds largest……….and is expected to be the 3rd…………by 2025
Democracy
Richest
Give 3 factors that have contributed to India’s economic growth
Emerging TNC’s
Increased trade
Huge working population
Why is India attractive for TNC’s
The population speaks good English
Strong IT skills
Work for notably lower wages than other countries
Give some TNC’s that operate within India and the impacts on society
Toyota, Volvo, and Hyundai all manufacture their cars there
BT and Virgin Media have their call centres there
Increased employment + education to its employees
India’s GDP per capita has risen from $1,345 in 2010 to $…. in 2020. What is the effect
3000
Created domestic demand, increasing India’s industrial sector, causing an out shift of AD (multiplier effect).
How have TNC’s increased the welfare of the population
Set up schemes to provide new facilities to local communities like schools or healthcare, rising GDP per capita
Improved infrastructure, new roads and internet cabling providing greater accessibility and promotion of jobs
Provide tax to goverment, can be used in development projects
Give a prominent Indian based TNC
Tata Motors - acquired the JLR company in 2008, enabling it to gain a foothold in the well-established market of the UK, increasing economic prosperity back home as larger taxes
India’s imports and exports have…………between 2006-2012
Trebbled
What are India’s biggest imports
Crude oil, silver and electronic goods (11th biggest importer in the world)
Are Indian imports increasing or decreasing
Slightly decreasing (-1.4%)
Promoting domestic infrastructure + less subjected to tariffs from other countries
Are Indian exports increasing or decreasing
Increasing (+1.4%)
Biggest exports = petroleum jelly, diamonds, pharmaceuticals and transport equipment
India holds…of the world’s population and has one of the…………..populations in the world with the average age being…instead of 35 in China and 48 in japan
1/6
Youngest
29
What percentage of bananas are free trade
40%
How many UK companies are involved with fair trade
500
By what percentage has income risen in ADC’s since 2000 (Due to WTO and Free Trade)
60%
