The nature and control of trade Flashcards
How has Africa not benefitted from the growth in wealth and trade globally?
This can be explained by:
International trade is very much controlled by TNCs, and they have chosen to not invest heavily in Africa.
In Asia, free trade zones have been used to attract investment.
Africa will remain unattractive to investment until it develops infrastructure, higher political stability and higher skilled people.
How has free trade come to dominate global trading?
WTO has led a series of trade agreements since the 50s which have removed:
Taxes and tariffs on imports.
Quotas on imports
Subsidies for domestic producers.
Free trade?
Has certainly become freer but for some countries this is an illusion. For countries outside trade blocs there can be barriers as they cant access the tariff free imports and so on.
Many African countries are still trapped in a colonial trade pattern of exporting raw materials such as coffee, copper and timber
Control
Superpower economies also control innovation and technology. New inventions such as drugs, microchip and engines are patented, and users must pay a royalty or licence fee to use technology.
75% of these fess goes to USA, EU and Japan. It’s just another way which superpowers and developed economies control both trade and availability of technology.
