U3 Global interdependence: Patterns and trends in global trade

Question 1

What has encouraged growth in trade?

Answer 1

Trade organisations
- World Bank, World Trade Organisation
- have caused growth in free trade agreements (such as with China, Japan and Korea)

Multinational corporations
- have developed global value chains (when components are sourced from multiple countries and assembled in one central location)
- have allowed advancements in technology (internet)

Advancements in transport technology
- improved airplanes and cargo ships
- have made trade more efficient and reliable

Question 2

Global financial crisis

Answer 2

• global trade cell during 2007-2008
• occurred due to US house prices falling and causing borrowers to be unable to repay their loans
• the recession in the US caused the failure of other economies due to interdependence

Question 3

Covid-19 recession

Answer 3

• caused a decline in global trade
• fights stopped and businesses closed during lockdowns, so many economies were slowed down and dependent on government incentives
• airline, tourism, entertainment, food and drink and arts industries were the most affected