Pattern of Trade Flashcards
What is the geographical pattern of trade
Countries with whom businesses and people trade
What is intra-regional trade
Trade between companies in the same region
What is the gravity theory
Countries tend to trade most with other nations in closest proximity
What is the commodity pattern of trade
The type of products (goods vs services) that are traded internationally - we can see the extent that a country has a dependence on primary vs manufactured vs service exports
What do many less economically developed countries rely heavily on
Primary product exports
Factors affecting comparative advantage
Natural resources
Unit wage costs
Infrastructure
Non-Price Factors
Import Controls
Exchange Rate
Impact of Emerging Economies on Trade Patterns
Rising income means that they start to purchase more goods/services from elsewhere in the world
Increasing imports of commodities
Attract TNCs
Selling more medium to high-value exports instead of commodities or low-value-added items
Currency volatility in emerging markets can have a large impact on commodity prices and raw material prices in other countries
Rising tensions with developed economies
What is a trade bloc
An area where multiple countries agree to trade with each other with reduced or no trade barriers
What is a preferential trade area
An area where there is reduced protectionism on a number of select goods/services amongst the countries involved
What is a free trade area
An area where there is completely free trade between the countries involved but each country can set their own trade restrictions on countries outside of the agreement
What is the customs union
There is completely gree trade between the countries involved and they all agree to impose the same trade restrictions on other countries as each other
