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International Trade & Access to Markets Flashcards

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1
Q

What is international trade?

A

International trade is the exchange of money, goods and services between countries.

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2
Q

What time period has the globe experienced the fastest rate in the growth of trade

A

1980 - 2010

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3
Q

What was the approximate value of global trade in 2020?

A

The approximate value of global trade in 2020 was US$19 trillion.

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4
Q

Which country is currently the largest exporter of goods in the world?

A

China is currently the largest exporter of goods in the world.

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5
Q

What percentage of global Foreign Direct Investments (FDI) flows do Emerging Market Economies (EMEs) now receive?

A

Emerging Market Economies (EMEs) now receive more than 50% of global FDI flows.

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6
Q

What is China’s Belt and Road Initiative an example of?

A

China’s Belt and Road Initiative is an example of Foreign Direct Investment flows from Emerging Market Economies (EMEs).

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7
Q

Who is the largest recipient of FDI

A

The USA is the largest recipient of FDI, with China being the third largest recipient.

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8
Q

Which countries in the past dominated global trade and investment?

A

In the past, western countries such as USA, Germany and UK dominated global trade and investment.

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9
Q

Why does most trade take place between HDE countries?

A

Specialise in high-tech products.

Have wealthier populations with more disposable income.

Are more likely to have trade agreements.

Have better infrastructure.

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10
Q

What factors make Emerging Market Economies (EMEs) increasingly important to global trade

A

Lower labour costs.

Rapid economic growth creating demand.

Large and growing populations creating new consumer markets.

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11
Q

What type of commodities do Less Developed Economies mainly rely on for export?

A

Less Developed Economies rely mostly on the export of primary commodities.

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12
Q

Define dumping in the context of international trade.

A

Dumping is when companies sell products at very low prices in foreign markets, often below the cost of production.

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13
Q

What percentage of global copper imports does China account for?

A

China accounts for over 40% of global copper imports.

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14
Q

What are the three largest sources of copper imports for China?

A

The largest sources of copper imports for China are Chile, Peru and Mexico.

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15
Q

How has China’s demand for metals affected African countries?

A

China has invested heavily in African mining, such as in Zambia, to help meet its demand for metals. This is leading to the development of new trading routes and relationships.

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16
Q

What is the main driver of the dramatic increase in demand for metals?

A

The dramatic increase in demand for metals is driven mostly by Emerging Market Economies, particularly China.

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17
Q

What is a trade bloc?

A

A trade bloc is a group of countries that work together to increase trade and boost economic growth by reducing barriers to trade between member nations.

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18
Q

Name three examples of major trade blocs.

A

The EU.

The USMCA.

ASEAN.

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19
Q

What is the main purpose of the World Trade Organization (WTO)?

A

The main purpose of the WTO is to increase the volume of international trade by promoting free trade and helping to resolve trade disputes between member nations

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20
Q

What does SDT stand for in the context of World Trade Organisation (WTO) agreements?

A

SDT stands for Special and Differential Treatment.

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21
Q

What is the EU’s Everything But Arms (EBA) initiative?

A

The EBA initiative is an example of Special and Different Treatment that allows least developed countries to export all products (except weapons) to the EU without any tariffs or quotas.

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22
Q

What is the Schengen area?

A

The Schengen area consists of 23 European countries that have removed border controls allowing people and goods to move freely between countries.

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23
Q

What is a Transnational Corporation (TNC)?

A

A Transnational Corporation (TNC) is a company that operates in multiple countries, locating their headquarters, production and sales in different countries.

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24
Q

What percentage of global trade is linked to TNCs

A

80%

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25
What is Westernisation in the context of TNCs?
Westernisation refers to the spread of Western cultures and ideas globally due to the dominance of Western-owned TNCs.
26
Define vertical integration.
Vertical integration is when a company owns different parts of the supply chain, e.g., Starbucks is involved in every stage of its supply chain, from growing and processing coffee beans to making and selling cups of coffee.
27
What is horizontal integration?
Horizontal integration is when a company buys out rival companies at the same stage of production, e.g., Kraft's acquisition of Cadbury and later merger with Heinz.
28
What is outsourcing?
Outsourcing is when a company contracts work out to external suppliers, often in countries with lower labour costs.
29
What is the multiplier effect in the context of Transnational Corporation (TNC)?
The multiplier effect refers to how the economic impact of TNCs can be amplified as money circulates through the local economy, creating additional jobs and economic activity beyond direct employment.
30
What is Fairtrade?
Fairtrade is a system that aims to pay a fair and guaranteed price for a product, improve working conditions, and pay a premium that is reinvested in the community.
31
What is the most produced, traded and consumed fruit
Bananas
32
Name three major Transnational Corporations (TNCs) that dominate the global banana trade.
Three major TNCs that dominate the global banana trade are Chiquita, Dole, and Del Monte.
33
What is vertical integration in the context of the banana trade?
Vertical integration in the banana trade refers to TNCs controlling the entire supply chain, from the growth of the bananas to transportation and marketing.
34
What percentage of bananas are fairtrade in the uk
40%
35
What percentage of exported bananas originate from Central and South America and the Philippines?
More than 90% of bananas for export originate from Central and South America and the Philippines.
36
What is one positive impact of the banana trade?
The creation of employment opportunities. Nutritional benefits. Export earnings. Development of infrastructure.
37
What is one negative impact of the banana trade?
Extensive use of chemicals such as pesticides and herbicides. Use of artificial fertilisers. Exploitation of workers. Child labour.
38
How has Fairtrade benefited banana farmers in the Windward Islands?
Fairtrade has significantly benefited banana farmers in the Windward Islands by enabling them to receive above market value for their crops when before they struggled to make a living.
39
By how much have fairtrade farmers reduced their pesticide use by
50%
40
What is the global food system?
The global food system encompasses all the activities involved in the production, processing, distribution and consumption of food throughout the world.
41
What percentage of the world's grain production is used for animal feed?
Approximately, 36% of the world's grain production is used for animal feed.
42
What are GM crops?
GM (Genetically Modified) crops are crops that have been developed to increase yield and improve resistance to disease and drought.
43
What percentage of soybeans in the USA are GM crops?
Approximately, 92% of soybeans in the USA are GM crops.
44
Define drip irrigation.
Drip irrigation is an advanced irrigation system that applies water directly to plant roots and can reduce water use by up to 60%.
45
Which two countries are the largest producers of palm oil?
Indonesia and Malaysia are the largest producers of palm oil, accounting for more than 80% of all palm oil production.
46
What does RSPO stand for?
RSPO stands for Roundtable on Sustainable Palm Oil.
47
What percentage of global palm oil production is RSPO certified sustainable?
RSPO certified sustainable palm oil now accounts for over 20% of global palm oil production.
48
What is an environmental advantage of TNCs for the host country?
Companies bring technology and expertise to reduce pollution and create a safer working environment.
49
What is an environmental advantage of TNCs for the parent country?
LDEs (Less Developed Economies) often have relaxed environmental laws, allowing TNCs to operate more freely.
50
What is an environmental disadvantage of TNCs for the host country?
TNCs may exploit natural resources and cause pollution during production.
51
What is an environmental disadvantage of TNCs for the parent country?
TNCs may contribute to global pollution and climate change, which indirectly affects the parent country.
52
What is a social advantage of TNCs for the host country?
TNCs introduce new production methods that improve productivity and create more job opportunities.
53
What is a social advantage of TNCs for the parent country
Headquarters are often in the home country, creating jobs and reducing unemployment while developing employee skills.
54
What is a social disadvantage of TNCs for the host country?
Workers may be exploited—long hours, low pay, and poor working conditions.
55
What is a social disadvantage of TNCs for the parent country?
Manufacturing moving abroad can lead to unemployment in the parent country.
56
What are economic advantages of TNCs for the host country?
TNCs create jobs, leading to a positive multiplier effect and economic growth due to FDI and employment.
57
What are economic advantages of TNCs for the parent country?
TNCs use outsourcing/offshoring to maximize profits and bring in foreign direct investment (FDI); labor is also cheaper abroad.
58
What are economic disadvantages of TNCs for the host country?
Local businesses may struggle to compete; inequality increases as TNC profits go mostly to the rich in parent countries
59
What are economic disadvantages of TNCs for the parent country?
Profit shifting to tax havens reduces tax revenue, potentially impacting public services like schools and hospitals.
60
What are the top 4 producers of bananas
india china indonesia brazil
61
What two different groups of producers are there in banana trade
ACP group (africa, caribbean and pacific) includes snall producers Dollar producers of latin america (primarily ecuador and colombia) controlled by large US TNCs
62
What TNCs dominated the banana trade
chiquita, dole, del monte all AMERICAN
63
When did the banana trade war extend from
1992-2009
64
Why was the banana war started
EU countries negotiated a trade agreement with former colonies. Lome convention was made with 71 countries from the APC They were given special and differential treatment with tariff-free import quotas. To allow them to develop
65
What did US TNCs do after the special and preferential treatment given to APC
get the WTO involved gave WTO-approved sanctions on a range of EU products
66
When did the banana war stop
2009
67
What did big banana companies do after they stopped dominating the market
relocate to west africa in search for lower labour costs
68
What is vertical integration
an arrangement in which the supply chain of a company is owned entirely by that company from raw to finished
69
What is horizontal integration
a company diversifies its operation by expansion, merger or takeover to give a broader capability at the same stage of production
70
An example of horizontal integration
Disney
71
an example of vertical integration
apple

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