Trade

Question 1

What is international trade (2)

Answer 1

Import and export of goods and services between countries
Increased 8X between 1980-2008

Question 2

How is patterns changing (3)

Answer 2

Developed countries remain biggest traders
Emerging countries are catching up
China = largest exporter

Question 3

Less developed - AFRICA countries chnage in trading (2)

Answer 3

1995 = African countries accounted for 2% world trade
2010 = over 3%

Question 4

What is fair trade

Answer 4

Way of trading that supports people in lesss developed countries who make products exported to developed countries

Question 5

What is foreign direct investment

Answer 5

When a person, company or groups ends money to another country in order to generate profit

Question 6

What attracts foreign investors (4)

Answer 6

Size of the market
Stability if market
Possibility of extracting resources
Ability to access large financial sector

Question 7

Rise in FDI

Answer 7

volume increased from $400 billion in 1996 to $1500 billion in 2016

Question 8

Pattern of investment chnage (2)

Answer 8

Since 1980s = developed countries began investing in emerging economies and developing countries
China, India, Brazil some of largest investors

Question 9

Change in we’re investment comes from

Answer 9

Emerging economies invest alot

Question 10

What is trading bloc (2)

Answer 10

Free trad between member countries
Common external tariff in non members

Question 11

Developed countries trade + how much (2)

Answer 11

Most trade occurs between developed
2013 = imports and exports between us and eu accounted for over 30% global product trade

Question 12

Emerging economies sector that’s most important

Answer 12

Manufacturing sectors are increasingly important

Question 13

Less developed countries trade with who

Answer 13

Mainly trade with less developed countries

Question 14

What is access to markets (2)

Answer 14

How easy it is for countries and co panties to trade with each other
Determined by extent of barriers

Question 15

What’s affects access to markets (3)

Answer 15

Wealth
Developed countries often put higher tariffs of goods imported to less developed C
Harder for less developed to access market

Question 16

What increases access to market (2)

Answer 16

Trading blocs
Less developed may be left with high tariffs if not part of bloc

Question 17

What are special and differential treatment agreements by wto (2+)

Answer 17

Let less developed countries bypass developed countries’ tariffs = greater market access
Example = EUs 2001 Everything but Arms agreement = allows least developed to export some products to EU w/o paying tariffs

Question 18

Positive of SDT (2)

Answer 18

Less developed countries can diversify their range of industries
Introduce manufacturing or tourism

Question 19

SDT agreements bad

Answer 19

Allow cheap imports into developed country

Question 20

Different access to markets economic consequences (2)

Answer 20

Countries with poor access = can’t establish new industries = high tariffs
Dependant on selling low value primary products = low GNI

Question 21

Different access to markets = social consequence (3)

Answer 21

Better access = higher paid jobs = higher y = higher SoL
Less = less money for healthcare + education = QoL is lower
Poorly paid work in less DC = Sweatshops

Question 22

What is a TNC + how much trade when (2)

Answer 22

Companies that produce, sell or are located in multiple countries
80% global trade linked to TNC in 2013

Question 23

Examples of TNC (3)

Answer 23

Primary industry = shell
Secondary industry = Toyota
Tertiary industry = Aviva

Question 24

What do TNC bring to countries (4)

Answer 24

Investment
New tech
Promotes cultures
Job creation

Question 25

How do TNC connect countries together (3)

Answer 25

Spatial organisation Create a global supply chain because different parts of business located in different countries

Question 26

Where are headquarters of TNC

Answer 26

Big cities in developed countries = skilled workers + transport

Question 27

Research and development were TNC

Answer 27

In cities and towns were highly educated people = same country as headquarters

Question 28

Where are factories located TNCs (2++)

Answer 28

Less developed countries where production costs are lower =Nestle have factory in Bangladesh Some have were there market is = Nissan in uk = avoid import and export tax + reduce transport

Question 29

What is a merger

Answer 29

When 2 companies agree to become 1 bigger one

Question 30

What is acquisitions

Answer 30

One company buys another company

Question 31

Using subcontractors + TNC

Answer 31

TNCs can use foreign companies to manufacture products w/o actually owning business

Question 32

What linkages to TNCs create (3)

Answer 32

Mergers Acquisitions Use sub contractors

Question 33

What is vertical integration (3+)

Answer 33

When a company takes over other parts of supply chain Through mergers, acquisitions and FDI She’ll owns every part of supply chain

Question 34

What is horizontal integration

Answer 34

Company merges with or takes over another company at the same stage of production = retail chain takes over a retail chain

Question 35

How do TNC expand operations to gain more control

Answer 35

Vertical and horizontal integration

Question 36

Exmaple of horizontal integration (2)

Answer 36

Disney took over Pixar studios in 2006 Both film production companies

Question 37

How do TNC take Adavanatges of supply chain (5+)

Answer 37

Economies of scale = most value for whole supply chain Invest in C with: Big natural resources to exploit = primary Low labour costs + cheap land = secondary Well educated pop = tertiary Invest in countries with weak regulations

Question 38

What is infra firm trading

Answer 38

One Dickson of a TNC trades with another part of the TNC

Question 39

Example of intro firm trading (3)

Answer 39

Tech firm = intel Some microchips assembled in cost rich but sells them to USA Costa Rican subsidiary sells them to intel in USA

Question 40

TNC multiplier effect (4+)

Answer 40

Open new factory = jobs = more y = helps local firms + gov (tax)

Question 41

How do TNC take advantage of global marketing (3)

Answer 41

TNC = lots of money to spend on advertising Change product to reflect national cultures = gain knowledge of local market = mcspicy in India Aim = recognisable brand