Th4.1: Disadvantages of Specialisation and Trade

Question 1

What are the five advantages of specialisation and trade?

Answer 1

over-dependance
structural unemployment
environment will suffer
loss of sovereignty  
loss of culture

Question 2

Over-dependance

Answer 2

trade can lead to over-dependance, where some countries become dependant on particular exports or others, imports. this can cause problems if there are large price falls in the exports or if imports are cut for political reasons

Question 3

Structural unemployment

Answer 3

it can cause structural unemployment as jobs are lost to foreign firms who are more efficient and competitive. the less mobile the workforce, the higher the chance that changes in demand due to trade will reduce output and employment over long periods of time

Question 4

Environment will suffer

Answer 4

environment will suffer due to the problems of transport as well as the increased demand for resources e.g deforestation

Question 5

Loss of sovereignty

Answer 5

countries may suffer from a loss of sovereignty due to signing international treaties and joining trade blocs, for example in the EU

Question 6

Loss of culture

Answer 6

loss of culture as trade brings foreign ideas and products to the country