Pattern Of International Trade Flashcards
Commodity
A good or material (not a service) interchangeable through trade or commerce such as a raw material.
Outsourcing
Cost of saving strategy where a company that has comparative advantage provides good or services for another company even though they could be produced in-house.
Balance of payments
Difference between a country’s inflows and out flows of of money over a period of time
Interregional trade
The flow of international trade among major world regions such as Europe, North America and Asia
Intra regional trade
The flow of international trade within one or other of the major world regions such as Europe and Asia.
Merchandise
- High value of exports in Europe and Asia.
- Low values in Africa
- Asia has 10x value of merchandise of Africa
- Export values of fuels and mining products are highest in the Middle East
- Exports of manufactures goods from Asia are 40x greater that Africa
-Over 10 million barrels of oil per day are moved between Middle East an Asia( excluding china)
Services
- global service exports valued at $7.1trillion in 2022
- growing rapidly and becoming increasingly complex with the growth of outsourcing
- replicates pattern of merchandise - dominated in advanced economies, less developed are net importers of services
- Europe largest net exporter of commercial services
Capital - financial
- Result of purchases and sales of real and financial assets
Real assets = physical or tangible items such as commodities
Financial assets = intangibles such as currency, stocks - finance flows in opposite direction to merchandise and services that are purchased
- FDI creates stable and long lasting links between countries
Inter-regional trade; Europe and N. America
- long lasting trade relationship
Transatlantic Trade & Investment Partnership (TTIP): - removed trade barriers by lowering tariffs promoting trade and economic growth
- strong level of interdependence - main single country export market for each other
- both exporting in manufacturing- machines, engines, pumps, vehicles, aircraft, pharmaceuticals
Intra - regional trade; EU
- Trading bloc with 27 member states
- single market economy
- trade defence policy which protects domestic industries
- lack of internal tariffs between members
Economics factors influencing patters of international trade
- physical infrastructure
- technology e.g.communications
- transport costs
- production costs
- FDI
- speed of border formalities
Social factors influencing patterns of international trade
- demographic factors affecting labour and import demand
- stage of demographic transition
- female empowerment
- levels of education
Political factors influencing patterns of international trade
- supranational organisations
- regional trading blocs
- National government policy
- trade agreements
- tariff/no-tariff barriers
- free trade areas
- transparency of customs authorities
Environmental factors influencing patterns of international trade
- distribution of natural resources
- climate
- soil fertility
- water scarcity
- deep water ports
- natural hazards
