International Trade/ Exports Flashcards
Why is international trade inevitable?
The global placing of materials and resources is unequal and unevenly distributed meaning that there’s a need for the movement of resources.
No SINGLE COUNTRY HAS EVERYTHING IT NEEDS
How is international trade problematic?
Countries can exert their political and economic power globally to ensure that the inequalities in resources and materials stay the way that they are
INTERDEPENDANCE means that if one market/ industry fails then it will have knock on effects for all those included and INTERLINKED
BUT
International Trade can be a barrier to the beginning of conflict and wars, increasing the risks and costs eg: some say WW3 would never take place due to the economic fallout.
What are the trends in International Trade over the last century?
Up until WW2 (since 1948) exports have increased EXPONENTIALLY
Within the 2000’s came the age of “mass consumption” where ideals such as the “throwaway culture” and TNC’s have cemented world trades growth.
What are the POSITIVES of International Trade?
COMPARATIVE ADVANTAGE- a country may specialise in making a specific product and therefore be able to make a product the fastest and cheapest eg: Umbrella City, China
ECONOMICS OF SCALE- producing a narrower range of goods and services means a country can create a greater VOLUME of products at a cheaper cost
PURCHASING POWER- if trade increases and many people buy a product then prices will be lowered for customers
TRANSFER OF TECHNOLOGY- incentivised as can help decrease costs and increase efficiency
INCREASED EMPLOYMENT= MULTIPLIER EFFECT
What are the NEGATIVES of International Trade?
OVER-SPECALISATION- specialised production cannot cope with a decrease in demand/ outsourcing- they need to be more diverse and changeable
PRODUCT DUMPING- if too much of a volume of products is created then products may have to be sold on the foreign market at a lower price
PROTECTIONISM AND TARRIFS- govs and countries may place protection on industries by imposing ADDITIONAL TAXES and TARRIFS
EXPLOIATION- the largest costs for businesses is LABOUR= wages may be decreased in order to maximise profits
Comparative Advantage CASE STUDY?
Songxia = “The Umbrella City” in China
-The Umbrella was originally exported via the “Silk Road” to Asia and then across Europe
-Makes around 1 billion umbrellas annually with 1,200 factories
-The support from local gov allowed the creation of “Songxia Umbrella Industrial Park”
C.ADV=
+Specialisation= focused on umbrellas making them the fastest and cheapest
+Access to International Markets= Shanghai (260km away)
Describe patterns of International Trade and Investment?
Only 0.6% of International Trade comes from the 50 poorest countries (LIC’s) in the world= PRIMARY PRODUCT DEPENDANCE
Raw material economies are vulnerable:
- Natural Disasters
- Market Fluctuations
- Landlocked around other LIC’s= no trading routes
NEE’s are where most International trade originates (BRICS)
Brazil, Russia, India, China, South Africa
What is the difference between North America (HIC) and China (NEE) in contribution to global trade?
1950= China= 0.9% of world trade
2013= China= 12.1% of world trade
2013= North America= 50% annual trade amount decrease
Which country is generally considered the largest component in FDI?
CHINA-“The amount of Capital Invested into Foreign Countries”
eg: In ANGOLIA in South Africa there are large oil reserves so China has invested capital into the region
What is the term to describe this action: “FDI dropped in Developed Countries by 14% since the 1950’s”
(European Central Bank)
A Transitional Economy
An economy moving from a centrally driven economy to a market driven economy.
Making “macroeconomic reforms”
What types of flows take place within International Trade?
Capital FDI Technology Manufactured Goods Raw Materials People (migration)
What are some reasons (AO2) for different flows of International Trade?
-Electronic waste generally moves from areas with high labour costs and strict environmental protection laws to areas (LIC’s) with LOW LABOUR COSTS and LAXER ENVIRNOMNETAL LAWS.
-Like all flows, electronics show an UNEQUAL power balance
Many would place this down to EXPOITATION FROM WEALITHER COUNTRIES.
- The dominance of NEE’s as the recipients of electronic waste is die to the fact that some EXPERTISE and INFACSTRUCTIRE is needed to mitigate waste and LIC’s don’t have this
- There’s a less definitive pattern of capital flows- after the 2008-2009 ECONOMIC CRISIS flows retracted back to the central countries but capital flows now show a less equal/ set pattern.
What are some reasons (AO2) for different flows of International Trade?
-Electronic waste generally moves from areas with high labour costs and strict environmental protection laws to areas (LIC’s) with LOW LABOUR COSTS and LAXER ENVIRNOMNETAL LAWS.
-Like all flows, electronics show an UNEQUAL power balance
Many would place this down to EXPOITATION FROM WEALITHER COUNTRIES.
- The dominance of NEE’s as the recipients of electronic waste is die to the fact that some EXPERTISE and INFACSTRUCTIRE is needed to mitigate waste and LIC’s don’t have this
- There’s a less definitive pattern of capital flows- after the 2008-2009 ECONOMIC CRISIS flows retracted back to the central countries but capital flows now show a less equal/ set pattern.
Define Trade Bloc?
Agreements between different governments that provide and manage trade
Give a general view of how trade blocs work?
- support free trade between member countries whilst excluding tariffs
- REGIONAL trading blocs make it easier for countries to trade with their neighbours
- INDUSTRY BASED trading blocs are based around specific industries- the main oil exporting countries eg: Saudi Arabia in OPEC
- SEZ- Special Economic Zones- increase the amount of trade within NEE’s and LIC’s
Give some examples of Global Trading Blocs?
NAFTA- North American Free Trade Agreement
OPEC- Organisation of Petroleum Exporting Countries
EU- European Union
