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Flashcards in International trade and access to markets Deck (117)
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1

What is the theory behind comparative advantage?

It suggests that countries should specialise in proving goods and services that they excel at producing, which they can then trade for things they aren't as good at producing

2

What limits comparative advantage?

Trade barriers - transport costs

3

What should comparative advantage allow?

Theoretically, production should increase nationally and globally through free trade between countries

4

What is a trade barrier?

Self-imposed government restraint on the flow of international goods or services

5

What is an import license?

This is a license issued by a national government authorising the importation of food from a specific source

6

What is an Import quota?

These set a physical limit on the quantity of goods than can be imported into the country

7

What is a subsidy?

These are grants or allowances usually awarded to domestic producers (producers within countries) to reduce their costs and make them more competitive against imported goods

8

What different forms can tariffs take?

Tariff form, or free trade

9

What is a tariff?

Tax on imports

10

What is free trade?

Eroded protectionism

11

What are the barriers to trade?

Import licenses
Import quota
Subsidies

12

What are voluntary export restraints?

Diplomatic strategy
Offered by exporting countries to appease the importing country

13

Why are voluntary export restraints applied?

To deter the importing country from using trade barriers

14

What are embargoes?

Partial or complete prohibitions of commerce and trade with a particular country

15

Why do people enforce embargoes?

For political reasons, usually to damage another countries economy by restricting the goods they re allowed

16

What are trade restrictions?

Types of import restrictions, can be technical or regulatory

17

Why are trade restrictions enforced?

To ensure the products are of a certain quality or standard

18

What is an example of a trade restriction?

The EU does not import goods that are knowingly produced using child labour

19

What happened at the end of the 20th century?

The emergence of free markets

20

What did the emergence of free markets intend?

Push for the removal of trade barriers

21

What is the GATT?

Global trade framework was strengthened by the
General agreement on tariffs and trade in 1947
Established after ww2, to set regulations on trade around the world

22

What was the GATT replaced by in 1995?

The WTO

23

What is the aim of the WTO?

Create free trade across the world

24

How successful has the WTO been in comparison to the GATT?

Average trade tariffs have shrunk to a 10th of there level when the GATT began operating in 1947

25

How much trade does the USA, Germany and Japan account for?

25% of global trade

26

How much trade does the rest of the G7 group account for? (UK, Canada, Italy and France)

Nearly 50% of global trade

27

What is taking place more recently which opposes threat on the dominance the G7 countries?

NEE - account for a growing share as trade alliances are growing (China especially)

28

Which country accounts for the largest growth of global trade?

China

29

What is the 2020 forecast for world trade goods?

$35 trillion

30

What is the 2020 forecast for world trade services?

$6 trillion