international trade and access to market

Question 1

International Trade

Answer 1

Exchange of goods and services across international borders

Question 2

Foreign Direct Investment (FDI)

Answer 2

Investment made by a company or country into another country’s economy

Question 3

Globalisation

Answer 3

Increasing interconnectedness of economies, cultures and population

Question 4

Global trends in trade- Overall Growth

Answer 4

-Global trade has increased significantly since 1950s
-Value of merchandise exports = $24 trillion in 2023 (WTO data)
-70% + of global trade now in manufactured goods

Question 5

Global trend in trade- Changing patterns

Answer 5

-Shift from west to east: China is now the largest export globally
-Rise of NICs/BRICS (e.g. India, Brazil, South Africa) as a rising power
-Trade in services (e.g. IT, finance, toyrism) growing rapidly- over 20% of all trade
-Intra-regional trade has increased

Question 6

Global trends in trade- Main trading Hub

Answer 6

-USA, China, EU dominated trade volume
-Global trade routes cluster around Asia-Pacific, Europe and North America

Question 7

Global trends in trade- Role of TNCs

Answer 7

-Conrol 80% + of global trade
-create global production networks and supply chains
-Exploit trade liberalisation and lower production costs

Question 8

Trend in Investment- FDI growth

Answer 8

-FDI flows rose rapidly since the 1980s due to globalisation and liberalisation
-Despite occasuonal dips (e.g. COVID), long-term upward trend
-$1.5-2 trillion/ year globally in recent years

Question 9

Trends in investment- Who invests

Answer 9

-Mainly developed economies (e.g. USA, UK, Japan, Germany)
-China has also become a major imvestor globally (belt and road initiative)

Question 10

Trends in investment - Where does FDI go?

Answer 10

-Emerging economies attract more FDI (e.g. India, Vietnam, Mexico)
-Top sectors: Manufacturing, real estate, infrastructure, tech.
-Tax havens attract disproportionate investment due to regulation

Question 11

Features of Global trade & investment patterns

Answer 11

-Core-periphery pattern: HICs dominate trade, LICs often depend on raw exports
-Trade Blocs: Regional groups (EU, NAFTA/ USMCA) simplify trade
-Global supply chains: Goods are produced in multiple countries before final sale
-Uneven power: WTO and IMF dominated by richer states
-Interconnected Markets: Disruptions ripple globally
-Services and digital trade: increasing share of cross-border economic activity

Question 12

Developed economies (USA & EU)

Answer 12

-Major exporters and importers globally
-Trade heavily in high-value goods and services (e.g. tech, pharmaceuticals, finance)
-Hold a strong influence in the WTO, IMF and World Bank
Key Trading Relationships:
-with each other (USA -EU transatlantic trade)
-With China (Large-scale imports of manufactured goods)
-With LEDs (import raw materials; export manufactured/ processed goods)
+
Profit from global trade, strong trade infrastucture
-
Tensions (e.g. tariffs, protectionism), outsourcing, job loss

Question 13

Emerging Economies (China & India)

Answer 13

-China is now the world’s largest exporter (e.g, electronics, textiles)
-India is dominated in It services, textiles and pharmaceuticals
-Engage in South-South trade (with other developing countries)
Key trading relationships:
-China-Africa: China invests in infrastructure, extracts resources
-India-EU/USA: outsourced services and skilled labour
-China- Latin America: energy and mining trade

+
Increased global influences, economic growth
-
Accusations of neo-colonialism, dependency concerns

Question 14

Less Developed Economies (Sub-Saharan Africa, Southern Asia, Latin America)

Answer 14

-Often export raw materials, agricultural goods, and cheap labour.
-Import high-value manufactured goods.
-Rely heavily on FDI and aid from more developed economies.
Key Trading Patterns:
-Africa–China: Oil, minerals, infrastructure in exchange for debt/aid
-Latin America–USA/China: Food, energy, metals to meet consumer demand
-South Asia–Global North: Cheap textiles and manufactured goods (e.g. Bangladesh’s garment industry)
+ Infrastructure, employment, market access
- Low profits, environmental degradation, trade dependency, vulnerability to global shocks

Question 15

Access to markets

Answer 15

The ability of a country or company to sell goods and services across borders

Question 16

Economic Development

Answer 16

Affects market access: HICs have greater access than LICs

Question 17

Trade agreements

Answer 17

Deals between countries that goven how they trade (e.g. EU, USMCA, WTO)

Question 18

Impact of unequal access- Economic impacts:

Answer 18

-HICs: Grow faster, dominate global trade, invest abroad.
-LICs: depend on low-value exports, face trade barriers.
-NEEs- Can industrialise quickly if they gain access

Question 19

Impacts of unequal Access- Social impacts

Answer 19

-HICs: Better services, healthcare, infrastructure due to wealth from trade
-LICs: slower development, poverty cycle continues
-Trade exclusion can limit job opportunities and reduce income

Question 20

Trade agreements & their role (WTO)

Answer 20

World Trade Organisation (WTO)
-aims to reduce trade barriers globally
-criticised for avouring riskier countries

Question 21

How does it affect well-being (positive + negative)

Answer 21

Positives
+ Trade can boost income, GDP and health outcomes
+Investment can improve infrastructure
+Regional trade deals encourage cooperation
Negative
-LICs stuck in low-value exports and dependency
-TNCs can exploit weak regulation or low wages
-Protectionist policies in HICs harm LIC exports (e.g. tariffs, subsidies)