Unit 10 Mini Case Studies

Question 1

Major exporters of goods

Answer 1

China: the largest exporter in the world with exports valued at about $3.59 trillion accounting for 18% of global exports (electronics, machinery, textiles)
Germany: exports totaled $1.66 trillion representing 34% of GDP (cars, machinery, chemical products)
US: exported valued at $2.1 trillion representing 9% of GDP (aircraft, machinery, pharmaceuticals)

Question 2

Major importers of goods

Answer 2

US: largest global imported worth $3.96 trillion mainly from China (electronics, machinery, consumer goods)
China: valued at $2.69 trillion which accounts for 17% of global imports (raw materials and high tech products)
Germany: totaled $1.56 trillion representing 32% of GDP (machinery, vehicles, energy products)

Question 3

Trade in services

Answer 3

India: exports valued at $323 billion contributing to 13% of GDP (IT and business outsourcing)
US: financial services, entertainment and education exports are worth $914 billion with services contributing to 80% of the economy
UK: export financial services, legal expertise and insurance with service exports totalling $418 billion, about 15% of GDP

Question 4

Key global trade flows

Answer 4

High volumes of electronics and consumer goods flow from China, Japan and South Korea to the US and Canada. China exported $583 billion worth of goods to the US in 2022
Machinery, pharmaceuticals and luxury goods from from Germany, France and Italy to the US with Germany exporting $146 billion in goods to the US in 2022
Africa’s exports of raw materials to China totaled $106 billion in 2022 due to China’s demand for resources

Question 5

Trade imbalances

Answer 5

US has a significant trade deficit importing $900 billion more than it exported in 2022 driven by imports from China
Germany operates with a trade surplus exporting $100 billion more than it imported in 2022 due to its strong manufacturing sector

Question 6

Regional trade agreements

Answer 6

EU facilitates free trade between member countries like Germany, France and Italy. Intra-EU trade is 64% of total EU trade
NAFTA/USMCA strengthens trade between the US, Canada and Mexico with trade within the bloc reaching $1.5 trillion in 2022
ASEAN promotes trade within Southeast Asia including Indonesia, Thailand and Vietnam reaching $3.6 trillion in 2022 or 7.5% of global trade

Question 7

Emerging markets

Answer 7

Vietnam: rising as a key exporter of electronics and textiles with exports valued at $372 billion and 94% of GDP
Brazil: a major exporter of agricultural products worth $335 billion and 19% of GDP
South Africa: a leading supplier of minerals and precious metals with exports valued at $123 billion and 24% of GDP

Question 8

Challenges in global trade

Answer 8

Tensions between the US and China have led to tariffs on hundreds of billions of dollars of goods affecting global supply
COVID-19 and the Ukraine conflict have disrupted trade flows. Global container shipping costs increased by 200% during the pandemic
Many developing nations rely heavily on exporting low value raw materials while importing expensive finished goods limiting economic growth potential

Question 9

Examples of product reputations

Answer 9

German cars
Scotch whisky
Swiss watches
Japanese high tech products
Belgian chocolate

Question 10

Manufacturing industry in Canada

Answer 10

The manufacturing industry in Canada benefits from the proximity of the large American market

Question 11

Tourist industry in France

Answer 11

The tourist industry in France benefits from the large populations of neighbouring countries that can reach France relatively quickly and cheaply

Question 12

Singapore strategic location

Answer 12

Singapore, at the southern tip of the Malay peninsula is situated at a strategic location along the main trade route between the Indian and Pacific Oceans

Question 13

Rotterdam strategic location

Answer 13

Rotterdam in the Netherlands is located near the mouth of the River Rhine. Many goods brought in by large ocean carriers are trans-shipped onto smaller river vessels and other modes of transport at Rotterdam or refined or manufactured in various ways in the ports industrial area

Question 14

Examples of colonial ties

Answer 14

The UK still maintains significant trading links with Commonwealth countries because of the trading relationships established at a time when these countries were colonies. Other European countries such as France, Spain, the Netherlands, Portugal and Belgium also established colonial networks overseas and have maintained these ties in the post colonial period

Question 15

Australia terms of trade

Answer 15

In December 2014 the Australian treasurer stated that Australia was in the grip of the biggest fall in the terms of trade since records began in 1959 because of a drastic fall in commodity prices

Question 16

Foreign exchange reserves examples

Answer 16

China alone holds 30% of foreign reserves. The US is now the world’s biggest debtor

Question 17

Trade blocs and regional trade agreements examples

Answer 17

NAFTA is a free trade area. Mercosur is a customs unions joining Brazil, Paraguay, Uruguay and Argentina in a market of 200 million people. The EU, NAFTA, ASEAN and Mercosur are regional trade agreements

Question 18

The EU

Answer 18

The EU is an economic union but its current level of economic integration was achieved in several stages. When Denmark, Ireland and the UK joined in 1973 it was a common market. The increasing level of integration has been marked by changes in the name of the EU. Initially it was the European Economic Community, then the European Community and from November 1993, the European Union. Some nations have been more in favour of greater integration than others

Question 19

Result of globalisation in Africa

Answer 19

If Africa increased its share of world trade by 1% it would earn $61 billion. The benefits of globalisation are not passed onto Sub-Saharan Africa, even exacerbating its problems

Question 20

Asia-Pacific Economic Cooperation Forum (APEC)

Answer 20

Its 21 members border the Pacific Ocean including Canada, the USA, Peru, Chile, Japan, China and Australia which have pledged to facilitate free trade

Question 21

The Cairns Group of Agricultural Exporting Nations

Answer 21

Formed in 1986 to lobby for freer trade in agricultural products including Argentina, Brazil, Canada, New Zealand, Australia, the Philippines and South Africa