Trade - ECONOMIC INTERACTION Flashcards
The IMPORTANCE of TRADE
What is one of the keys to understanding development?
Trade between rich and poor countries.
The IMPORTANCE of TRADE
What have citizens of rich countries only recently started doing?
Showing interest in issues surrounding trade.
The IMPORTANCE of TRADE
What has happened since 1950?
International trade has been replaced by a supply of goods.
The IMPORTANCE of TRADE
Who controls most trade?
What does this result in?
What theory does this relate to?
Rich countries as they control trade routes and the means of trade.
This benefits them.
This relates to dependency theory.
Global RISKS of TRADE
What can change prices?
What does this result in?
Supply and demand
Income
Global RISKS of TRADE
What does competition to do prices?
Drive them down
Global RISKS of TRADE
What tends to happen in countries?
Politics and fashion change demand.
Global RISKS of TRADE
What kind of products do poor countries rely on?
How does this effect the producers?
Products that are vulnerable to natural disasters.
The producers usually have no insurance.
Give examples of what Fairtrade stands for.
Good working conditions and pay
Recognition of trade unions
No forced child labour
COCOA FARMING IN GHANA
How did Ghana start having problems?
1970s - Ghanian farmers weren’t earning enough from cocoa production.
The Ghanian govt relied on taxes from exported cocoa, resulting in economic difficulties.
COCOA FARMING IN GHANA
What did the Ghanian government accept?
A “structural adjustment programme” from the IMF and World Bank to ‘rescue’ the economy.
This included removing subsidies to cocoa farmers, thereby increasing their difficulties.
COCOA FARMING IN GHANA
What was happening in Western countries which worsened Ghana’s economic situation?
Demand was being lost due to changes in trends in the West which ended up pushing down prices that Ghanian farmers could get.
