International trande and access to markets key terms Flashcards
Agglomeration
When companies in similar industries locate near to each other because of the benefits gained by sharing ideas and resources - called “agglomeration economies”
Embargoes
These involve the partial or complete prohibition of commerce and trade with a particular country. They are usually put into practice for political rather than commercial reasons e.g. the EU has an arms embargo against the export of weaponry and many countries have sanctions imposed, with strict trade controls in place e.g. Armenia, DRC, Iran, Lebanon, Sudan, Zimbabwe, etc.
Fair trade
A social movement whose goal is to help producers in developing countries achieve better trading conditions and to promote sustainability. It focuses mainly on agricultural-based products e.g. coffee tea, cocoa, sugar, wine, flowers, bananas, chocolate
Free market ideology
A free market is a system in which the prices for goods and services are determined by the open market and consumers in which the laws and forces of supply and demand are free from any intervention by a government
G20 group
An international forum for the governments and central banks of 20 major economies. It includes the G7 countries and the EU as a sinale member. Established in 1999 t aims to aive a voice to the maior developina economies (includina BRIC countries who felt that the WTO were not fully serving their interests
G7 countries
The Group of 7 is a group consisting of Canada, France, Germany, Italy, Japan, UK, USA. The EU is also represented within the G7.
They are the 7 major advanced economies as reported by the IMF. They represent more than 64% of the net global wealth ($263 trillion). A very high net national wealth and a very high Human Development Index are the main requirements to be a member of this group.
Glocalisation
A term used to describe products or services that are distributed globally but which are fashioned to appeal to the consumers in a local market e.g. in India McDonalds sells the Maharaja Mac
Group of 77 and China: A forum/coalition of developing nations established in 1964 when China was seen as a less developed economy. It aims to promote its members’ collective economic interests and create an enhanced joint negotiating capacity in the United Nations.
Horizontal integration: A strategy where companies diversify their operations by expansion
merger or takeover to give a broader capability at the same stage of production. This can either be complementary of competitive to its existing business e.g. Kraft Foods takeover of Cadbury in 2010 gave them a more diverse base in the grocery and confectionary market
Import licence: A licence issued by a national government authorising the importation of goods from a specific source
Import quota: These set a physical limit on the quantity of goods that can be imported into a country
Least Developed Countries (LDCs): low-income countries that face severe structural impediments to sustainable development. They are highly vulnerable to economic and environmental shocks and have low levels of human assets. There are currently 47 countries on the UN’s list of LDCs
which is reviewed every 3 years. LDCs have exclusive access to certain international support measures in particular in the areas of development assistance and trade.
Mercosur: Formed in 1991 and comprises of Brazil
Argentina
Multiplier effect: A situation where an initial injection of investment or capital into an economy (at any scale) in turn creates additional income by
for example
Pacific Alliance: Formed in 2011 and comprises of Chile
Peru
Regional trade agreements (RTAs); Within the WTO
these are reciprocal trade agreements between two or more partners. They include free trade agreements and custom unions special and differential treatment (SD): The WTO Agreements which contain provisions that give developing countries special rights
Subsidies: These are grants or allowances usually awarded to domestic producers to reduce their costs and make them more competitive against imported goods e.g. in 2010 the EU spent €39 billion on agricultural subsidies
which form over 40% of its budget. The largest subsidy is the Single Farm Payment
The Organisation for Economic Co-operation and Development (OECD): An intergovernmental economic organisation with 35 member countries
founded in 1960
Trade restrictions: Other import restrictions may be based on technical or regulatory obstacles such as the quality standards of goods being imported
or how they are produced. E.g. the Eu attempts to put restrictions on the import of goods knowingly produced using child labour Transatlantic Trade and Investment Partnership (TIP): A proposed trade agreement between the EU and the USA
Trans-Pacific Partnership (TPP): The largest ever trade agreement in history
signed in 2016
UN Conference on Trade and Development (UNCTAD): Together with other UN departments and agencies
they measure progress by the Sustainable Development Goals
- They work to ensure that globalisation benefits global society more fairly and effectively
Vertical integration: An arrangement in which the supply chain of a company is owned entirely by that company
from raw materials through to the finished product. This gives the TNC control over its supplies and stocks
Voluntary export restraints: This is a diplomatic strategy offered by the exporting country to appease the importing country and deter it from imposing trade barriers
