Global systems and governance Flashcards
(24 cards)
Economic growth
The volume of international trade has increased dramatically since the 1980s, and has increased by nearly 8 times
the pattern of global trade is….
Changing, developed countries remain the biggest global traders, but some NEES are catching up
LICs are becoming bigger…
Traders, but growth is SLOW.
More countries are opening themselves up for…
international trading by removing barriers to trade. This is done by trade blocs.
Raise in Fairtrade
Supporting people in less developed countries
Who is now the largest exporter of goods in the world?
China
Factors driving current patterns of global trade
-Comparative advantage
-proximity
-Agglomeration
-Market size & strength
-Geopolitical relationships
Comparative advantage
Countries specialise in producing and exporting goods that they can produce more efficiently at a lower cost.
Proximity
Trading more with countries that are closer to you, because it reduces transport costs
Agglomeration
Some industries tend to cluster in geographic areas as shearing of regional skills and species.
Market size & strength
Exports are drawn to larger, more affluent and growing markets where there is political interest in increasing sales.
Geopolitical releationships
Cooperate and trade with each other
FDI
Foreign direct investment- this is where a person, company or other group spends money in another country in order to generate a profit.
The volume of FDI rose dramatically by…
$400 billion in 1996 to nearly $1500 billion in 2016
Trading blocs
Are an association between different governments that promote and manage trade. Trade blocs remove barriers between their members, while keeping common barriers to countries that aren’t part of the bloc.
Access to markets is about…
How easy it is for countries and companies to trade with one another
International access to markets is determined by…
The extent of export and import barriers between the two countries
Access to the market is affected by wealth, Developed countries often…
Put higher tariffs on goods imported from less developed countries - this makes it harder for less developed countries to access the market
Developed countries also have more money to invest…
So they can avoid high tariffs imposed by developing countries by opening their markets to them
Access to the markets is also increased by being a member of…
Trading blocs- member countries have access to the markets of all other member countries.
Trade blocs of developed countries have access to lots of wealthy buyers, however…
Less developed countries outside the trade bloc may have to pay higher tariffs to export their goods to those markets. This puts less developed countries at a disadvantage
WTO
The World Trade Organisation was set up to increase trade and help resolve trade disputes between member countries. It sets rules about how countries should trade with each other
Economic impact on differential access to Markets
1) It is harder for countries with poor market access to establish new industries - they face higher tariffs when they try to sell abroad, making their products uncompetitive, and they may be undercut in their domestic markets by TNCs producing similar products more cheaply
2) This makes them more dependent on selling low-value primary products that tend to fluctuate in price, so countries with poor market access often have low Gross National Income (GNI). This means that they have less money to invest in industry, so their economic development is slow.
3) Countries with high levels of market access tend to see more economic growth because they can trade more. This means that their citizens are wealthier, they can afford to import a range of products, and they can develop high-tech industries, which boost their economy further
Social impact on differential access to Markets
1) People in countries with better market access tend to have higher-paid jobs, which gives them more disposable income, which increases their standard of living.
2) Countries with less market access have less money available for education and healthcare, etc, so the quality of life is generally lower. Better access to education in developed countries has created better access to jobs for women and ethnic minorities, giving them more power to shape their own lives and societies.
3) Much dangerous, poorly paid work has moved from developed countries to less developed countries.
