Week 6 Activities and Seminars Flashcards
How Did Empires Facilitate Trade?
Key Mechanisms:
Trade Networks: Established extensive routes connecting regions (e.g., British Empire’s global trade routes).
Standardization: Uniform systems for currency, measurements, and legal frameworks simplified trade.
Infrastructure: Investments in ports, railways, and roads supported commerce.
Security & Stability: Military protection ensured safe trading environments (e.g., Pax Romana).
Preferential Policies: Trade agreements favored intra-empire commerce (Imperial Preference systems).
Significance:
Empires laid the foundations for modern global trade systems by creating interconnected economies and standard practices.
How Do Imperial Roots Continue to Facilitate Trade in Modern Times?
Key Legacies:
Cultural & Linguistic Ties: Shared languages and cultural similarities foster easier communication and trust.
Institutional Frameworks: Legal and administrative systems from imperial times still shape modern trade policies.
Diaspora Networks: Migrant communities maintain economic links across borders, boosting trade.
Trade Agreements: Modern partnerships (e.g., Commonwealth of Nations) originated from imperial trade frameworks.
Significance:
Imperial legacies continue to shape global trade patterns by providing cultural, institutional, and economic continuity.
UK trade Post-Brexit
Figures show that the UK has recorded a record fall in trade with the EU since the end of the Brexit transition period.
Exports of goods to the EU plummeted by almost 41%
This was due to additional bureaucracy and sometimes unexpected costs and taxes associated with cross-border trade post Brexit
Brexit wipes out UK cheesemaker’s european business
British cheesemakers have fallen victim to the extra paperwork, costs and confusion that have hit many British exporters since the UK left the EU
As cheese is a fresh, perishable product, there are issues of it going out of date, the ‘use by’ date, and that it goes off during the now extended exporting process due to additional red tape post brexit
Many British cheesemakers are having to throw away loads of cheese as it is going off before it is able to be exported. This has led to a loss of profit and businesses having to stop exporting to EU countries
M&S has also had to close 11 stores in France, blaming brexit. M&S struggled to get goods into EU members Ireland and France, blaming the amount of additional paperwork.
Key Ideas from core reading: “De-globalisation? Global Value Chains in the Post-COVID-19 Age” by Pol Antrás
Summary of Key Ideas:
Slowbalisation, Not De-globalisation:
- The decline in global trade growth since the Great Recession (2008) reflects a natural slowdown after decades of hyperglobalisation (1986–2008), not an outright reversal.
Forces Behind Hyperglobalisation:
- Technological Advancements: ICT revolution and reduced communication costs made global supply chains more efficient.
- Trade Liberalisation: Falling tariffs and regional trade agreements fueled trade growth.
- Political Changes: Integration of former socialist economies like China and Eastern Europe into global markets increased global labor supply.
Why the Slowdown?
- Rising trade costs and political tensions (e.g., US-China trade war, Brexit).
- Technological Shifts: Automation and reshoring reduce the reliance on offshore production.
- Institutional and Political Barriers: Increased protectionism and political backlash against globalisation.
COVID-19’s Impact:
- The pandemic caused severe disruptions in global supply chains and exposed vulnerabilities in international logistics.
- Long-term impacts will depend on whether the pandemic is viewed as a temporary shock or a permanent structural shift.
Future of Global Value Chains (GVCs):
- Firms are unlikely to dismantle existing GVCs due to high sunk costs in setting them up.
- Political and institutional challenges, rather than technological ones, will likely dictate the trajectory of globalisation.
✨ Key Takeaway: The current trends suggest “Slowbalisation” rather than De-globalisation, with institutional, political, and pandemic-related challenges shaping the future of global trade.
US-China Trade Conflict
What is it?
A trade war between the US and China starting in 2018, driven by trade imbalances, tech competition, and intellectual property concerns.
Why did it happen?
- Trade Deficit: US imports more from China than it exports.
- Tech Dominance: US fears China’s rise in high-tech sectors (e.g., 5G).
- IP Theft: Allegations of stealing US technology.
What happened?
- Tariffs: US taxed Chinese goods; China retaliated.
- Tech Restrictions: US banned Huawei and limited China’s access to advanced tech.
- Phase One Deal (2020): Promised increased imports from the US but didn’t fully resolve tensions.
Impact:
- Higher Costs: Goods became more expensive.
- Supply Chain Shifts: Companies moved operations to Southeast Asia.
- Global Uncertainty: Economic growth slowed worldwide.
Current Status:
Tensions remain high with ongoing tech restrictions and “friendshoring” strategies.
✨ Key Takeaway: The US-China trade conflict is a power struggle over trade, technology, and global dominance, with long-term effects on prices, supply chains, and global relations.
Key Ideas from core reading: How COVID-19 Increased Global Trade Costs
- Transport and Travel Costs:
- Transport Costs: Account for 15–31% of trade costs depending on the sector.
- Maritime Transport: Delays and increased costs due to port restrictions and crew shortages.
- Air Transport: A 24.6% drop in cargo capacity caused freight costs to skyrocket.
- Land Transport: Border checks, driver shortages, and sanitary measures caused delays.
Impact: Higher transportation costs slowed global trade and increased prices. - Disruption in Business and Personal Travel:
- Face-to-Face Meetings: Essential for trust-building, managing global value chains, and finalizing deals.
- Services Hit Hardest: Tourism, passenger transport, and repair services rely on physical presence.
- Digital Substitutes: Online meetings helped but couldn’t fully replace in-person engagement.
Impact: Sectors relying on travel and physical presence faced severe cost increases. - Trade Policy Costs:
- Import Relief: Tariffs lowered on medical supplies and PPE to reduce costs.
- Export Restrictions: Many countries limited exports of critical goods (e.g., masks, ventilators).
- Digital Customs: Increased use of e-certificates and automated systems streamlined processes.
Impact: Policy changes focused on specific goods but had limited overall trade impact. - Uncertainty and Trade Finance:
- High Uncertainty Levels: 60% higher than during the 2003 SARS outbreak.
- Reduced Investment: Firms avoided new trading relationships due to economic risk.
- Trade Finance Crisis: Emerging economies struggled to access credit for essential goods.
Impact: Uncertainty slowed investment and weakened trust in global trade systems. - Long-term Outlook
- Persistent Costs: Travel restrictions and higher air freight costs may continue.
- Digital Adaptation: Reliance on e-interactions depends on ICT infrastructure.
- Policy choices: Government decisions on trade policy will shape future costs
Key Takeaway: COVID-19 increased global trade costs through disruptions in transportation, travel, policy barriers, and uncertainty, with long-term consequences for global value chains, logistics, and economic growth.
What is the central theme of the article ‘Hockey Sticks and Crosses’?
The article explores long-term economic growth patterns, focusing on sharp accelerations (hockey sticks) and persistent inequalities (crosses)
What does the ‘hockey stick’ metaphor represent in economic history?
The ‘hockey stick’ metaphor represents the sharp acceleration in economic growth during the Industrial Revolution
What historical period marks the ‘hokey stick’ growth pattern in economic development?
The Industrial Revolution, primarily in 18th-century Britain
What are the key rivers behind the sudden economic growth described by the ‘hockey stick ‘ pattern?
Technological advancements, institutional reforms, and capital accumulation
How does the ‘costs’ metaphor contrast with the ‘hockey stick’ in economic development?
The ‘cross’ represents persistent global inequalities, where some countries remain trapped in low-income levels despite global economic growth
What role did colonialism play in shaping global economic divergence?
Colonialism reifnroced structural inequalities, wtih colonies exploited for resources and labour
How do modern institutions impact long-term economic development?
Strong institutions - like property rights, political stability, and inclusive governance - are essential for sustained growth
What structural barriers limit economic catch-up in developing economies?
Weak institutions, corruption, lack of access to technology, and dependency on primary commodity exports
