Booklet 3 - International Trade and Access to Markets Flashcards
(24 cards)
Barriers to Trade
- Tariffs
- Import License
- Import Quota
- Subsidies
- Embargo
- Trade Restriction
Trade Tariffs Definition
A tax on imports
Import License Definition
License issued by a government authorising the importation of goods from a specific source
Import Quota Definition
A physical limit set on the quantity of goods that can be imported
Subsidies Definition
Grants/Allowances usually awarded to domestic producers to make them more competitive against imported goods
Trade Embargo Definition
Partial or complete prohibition of commerce and trade with a particular country - usually for political reasons
Trade Restrictions Definition
Import restrictions based on quality standards or the way they are produced
Comparative Advantage Definition
The principle that countries can benefit from specialising in the production of goods at which they are relatively more efficient or skilled. In this way, the consumers within each country gain the maximum benefit from international trade.
Trends in Global Trade
- Growth in ethical trade
- Since the recession, multilateral trade agreements on a global scale have been hard to achieve
- Volume increase by a factor of 8 between 1980 and 2008, but international flows have fluctuated over recent years
- HICs remain the largest traders, but NEEs are catching up
- LICs are joining global trade, but growth is slower
- During recessions and global shocks, international trade stalls
- Growth of regional trade blocs has led to the decrease in trade barriers
What are Special Economic Zones (SEZ)
Areas with different trade rules to boost investment
USA (HDE) Trading Relationships and Patterns
- Member of the NAFTA with Canada and Mexico before it was renegotiated to form the USMCA
- Withdrew from the the TPP during his first administration
- Trump aimed to persuade bilateral trade deals with individual countries, the US has 20 separate free-trade agreements
- Traditionally have been a protectionist economy, lagging behind in entering any formal trade agreements
EU (HDE) Trading Relationships
- 27 members trade freely
- 65% of the trade done in the EU is intra-regional
- EU negotiates trade deals as a bloc
- External tariff barrier for countries outside of the region
- Anti-free trade movements in the EU have gained popularity, such as the Canada-EU deal in 2017
China (NEE) Trading Relationships and Patterns
- 20% of global exports
- 15% of global imports
- Exports of cheap, state-subsidised steel onto the world market has triggered a trade war with the USA, leading to high tariffs on traded goods.
- In 2022, it was the No.2 economy in GDP, No.1 in total exports, No.2 in total imports
- No.67 in GDP per capita
- No.22 in Most complex economy on the Economic Complexity Index
- Import mainly raw materials from developing countries and exporting processed metals and manufactured goods for consumers in rich countries
- Recorded a $1 trillion trade surplus in 2024
- Main exports of Broadcasting Equipment ($272bn), Integrated Circuits ($212bn) and Computers ($181bn).
- Most exports to USA, South Korea and Japan
India (NEE) Trading Relationships and Patterns
Main Imports:
- Crude Oil
- Coal Briquettes
- Gas
Main Import Countries:
- China
- USA
- Saudi Arabia
Main Exports:
- Textiles
- Gold
- Chemicals
- Cars
- Refined Petroleum
- Diamonds
- Rice
Main Export Destinations:
- EU (UK and Germany)
- USA
- China
- Hong Kong
- Sustained and rapid industrial growth over the past 25 years
- Suffer from food insecurity and famines in the 1960s
Green revolution was successful and now have a more secure food production
Latin America (LDE) Trading Relationships and Patterns
Intraregional trade increasing, potential for the pacific Alliance and Mercosur to combine
Pacific Alliance Information
- Formed in 2011
- Chile, Peru, Colombia, Mexico
- Ecuador has applied to join
- More open to bilateral trade
- Asia-Pacific is the main market
Mercosur Information
- Formed in 1991
- Brazil, Argentina, Paraguay
- Bolivia has applied
- Venezuela is a suspended member
- Single market mimics the EU
- Main exports are raw materials energy, minerals and food resources
- Views EU and North America as main markets
Sub-Saharan Africa (LDE) Trading Relationships and Patterns
Africa Free Trade Continent Area:
- World’s largest free trade area
- Main trading partner was Europe (colonial hangover) but now Africa is more prominent
- China’s investment in infrastructure has improved connectivity
- Lack of skills and poor infrastructure has discouraged FDI
What is the CPTPP
Comprehensive and Progressive Agreement for Trans-Pacific Partnership
- World’s biggest trade agreement since NAFTA
Who is in the CPTPP
11 nations:
- Australia
- Canada
- Japan
- Mexico
- New Zealand
- Singapore
- Vietnam
- Peru
- Malaysia
- Chile
- Brunei
- Darussalam
UK’s Relationship with the CPTPP
- Allows the UK to secure better trade terms, replace bilateral agreements and better access markets for services, digital trade and supply chains
- Benefits from high openness and diverse economies
- Will join the CPTPP on the 15th December 2024
Future of the CPTPP
- Facilitate economic co-operation between its parties, covering all aspects of the economy, invested and traded in goods and services
- “Managing accession in a prudent, efficient and strategic manner”
Fair Trade
An approach to international trade that seeks to promote greater equity and justice in the global trading system
SDT
Special and Differential Agreements
- EU everything But Arms (allows LDCs to export goods with no tax)
- Provides duty-free and quota-free access to the EU market for all products, except arms and ammunition
- From the World’s 47 LDCs
