Trends in the volume and pattern of trade and investment

Question 1

Overview

Answer 1

Emergence of free market ideas at the end of the 20th century saw a push to remove existing barriers

The global trade framework has been strengthened by the WTO with free trade as it aim in removing barriers to trade

Question 2

Volume and pattern of trade overview

Answer 2

The pattern of global trade has changed due to greater integration of economies

Number of factors driving current patterns of global trade

Question 3

Factors

Answer 3

Comparative advantage- countries specialise in producing and exporting goods that they can produce more efficiently at a lower cost eg Umbrella City China

Proximity- countries more likely to trade with neighbours as it reduce costs but also for cultural reasons. Why trade is often organised on regional basis and still dominates

Question 4

Factors 2

Answer 4

Agglomeration- some industries tend to clutter in geographical areas as sharing regional skills and information saves costs

Market size and strength- exporters are drawn to more larger and affluent markets where there is potential to increase volume and value of sales

Geopolitical relationships- political alliances are important

Question 5

Main patterns of global trade flows

Answer 5

Intra-regional trade is strong within Europe and Asia-Pacific region

Latin America has the strongest trade flows with North America

North America has a trade deficit