Ads + Dis of World Trade Flashcards Preview

Globalisation > Ads + Dis of World Trade > Flashcards

Flashcards in Ads + Dis of World Trade Deck (12):
1

Main advantages of World Trade?

- Increased employment
- Comparative advantage
- Economies of scale
- Competition
- Transfer of Technology (TOT)

2

Main disadvantages of World Trade?

- De skilling
- Product dumping
- Over specialisation
- Protectionism
- Worker Exploitation

3

Describe De skilling

Disadvantage of Trade
- new technology can result in the loss of traditional skills and crafts. As these skills are not required to operate machines in factories producing goods for export

4

Describe Protectionism

Disadvantage of Trade
- to protect home markets some countries can introduce tariffs (trade taxes) to combat deindustrialisation and urban decline. So some markets now made inaccessible to trade

5

Describe Product Dumping

Disadvantage of Trade
- Over production can lead to products being sold at very low prices in foreign markets. This can impact negatively upon ‘local’ business

6

Describe Worker Exploitation

Disadvantage of Trade
- If goods are produced for export in a competitive trading environment then labour costs must be kept low. This can lead to exploitation by some TNCs who may threaten to relocate

7

Describe Over Specialisation

Disadvantage of Trade
- If conditions change and demand falls for a product then countries have no fall-back position if they only produce a small range of goods

8

Describe Increased Employment

Advantage of Trade
- If goods are sold outside the home market this is likely to increase demand and lead to more employment where the goods are produced

9

Describe Economies of Scale

Advantage of Trade
- If countries specialise in producing only a narrow range of goods which are good at producing then they can produce large amounts at low unit costs

10

Describe Transfer of Technology (TOT)

Advantage of Trade
- New technologies become widely available and this can bring down production costs and prices for consumers

11

Describe Competition

Advantage of Trade
- If competition is increased as a greater choice of goods are available then prices for consumers are likely to fall

12

Describe Comparative Advantage

Advantage of Trade
- A country can specialise in producing only things that it can do efficiently and at low cost.