Lesson 34 - World Trade Organisations Flashcards
Give three examples of an external shock
.Global financial crash -2007-2009
.Eurozone economic crash
.Volatile world commodity prices
.Growth slowdown in Emerging nations
.Currency volatility and policy changes
.Extreme weather events
.Geo-political uncertainty and risks from terrorism
Give two advantages of World trade organisations
.Rules make business easier
.Reduces the cost of living
.It encourages choice
.Stimulates economic growth
Give two disadvantages of world trade organisations
.Trade rules are unfavourable towards developing countries
.Rules usually favour multinationals
.Increased competition
What are customs unions?
A group of countries that agree to abolish tariffs, and adopt a common external tariff
Give two examples of customs unions
.EU
.South Africa Customs Union
.Eurasian customs union
How does a trading bloc differ from a customs union?
A customs union has a common external tariff, while a free trade does not
What four key freedoms is the EU built on?
.Free Trade In Goods
.Mobility of Labour
.Free movement of Capital
.Free trade in Services
Give two possible advantages of joining the single currency market
.Large currencies are usually more stable so for smaller countries it is easier to borrow money
.A currency enhances the gains from being in the single market-encourages more cross border trade in goods and services
.Membership of a single currency market encourages inward investment
.It eliminates the costly conversion of money, could improve labour mobility in the area
Give two drawbacks of joining a single currency market
.A country’s central bank loses the ability to set monetary policy and alter exchange rates to meet macro objectives
.The ability to devalue the exchange rate to help improve price competitiveness in overseas markets is lost
.There are adjustment costs when switching currencies
Give a benefit of regional trade agreements
It can lead to trade creation effects- a deal that lower tariffs and abolish quotas and other barriers to trade
What are the 4 roles the WTO believe it has?
Conductor, tribunal, monitor and trainer
How does the WTO undertake a conductor role?
It ensures that the rules it created are followed. Rounds of negotiation take place to develop new rules
How does the WTO undertake a tribunal role?
Involves settling disputes between members through convening a panel of experts
How does the WTO undertake a Monitor role?
It reviews the trade policies of its members to make sure rules are being applied correctly and consistently
How does the WTO undertake a Training role?
Training to government officials in developing countries, to help them engage with other WTO members
