Social interdependence.
Health, education, & culture
Economic interdependence.
Trade, technology, employment, labour flows, TNCs and investment, supply chains, industrialisation
Environmental interdependence.
Global commons, global climate change, unsustainable practises
Political interdependence.
Intergovernmental organisations, security and stability, world peace.
Why do governments use protectionism to restrict trade?
To protect their established/emerging industries and to make imports less and exports more competitive.
Define comparative advantage.
As countries have difference resources it makes sense to specialise in the production of particular goods and services and trade these with other countries to allow consumers access.
What do regional trade agreements (RTAs) aim to do?
Promote free trade.
When do economic ‘shocks’ occur?
During economic recessions.
Define agglomerations.
When industries cluster together in geographical areas to share resources and specialised information.
Issues with international trade.
- Core nations are favoured
- Poor market access due to tariff barriers
- Low value of primary products mean the minimum price is paid to workers
- SAPs force LICs to open markets meaning they are unprotected
- Poor employment standards
HDE trade (USA)
USA trades heavily with major global economies, exporting high value goods and services while importing manufactured consumer goods. They are leading the global consumer market. The USA is a protectionist economy in order to safeguard jobs, maintain economic security, and reduce reliance.
HDE trade (EU)
The EU is a major trading partner with 65% of trade being inter-regional. It has protectionist measures and is wary of MERCOSUR who don’t meet environmental standards.
EE trade (China)
Chinas growth is based on expansion of manufacturing consumer goods for HICs. China is a major global trading power, exporting 20% of global exports and importing 15% of global imports. China is in a trade war over steel with North America who have tariffs on Chinese goods of 145%.
EE trade (India)
India has a large young workforce, investment for industrialised development, and is outsourcing low skill workers.
LDE trade (MERCOSUR)
MERCOSUR has free movement of labour between member states.
LDE trade (Pacific Alliance)
The PA is likely to merge with MERCOSUR. They are challenged by varying levels of economic growth and different political ideologies.
LDE trade (Africa)
Africa is disadvantaged due to colonialism and language divisions. The development of AfCFTA is critical for growth and job creation.
What is free trade?
The selling and buying of products in mainstream markets.
What does free trade include?
- Insufficient protection
- Increased economic growth
- Lower prices for consumers
- Increased amount of trade
- Encourages ‘race to the bottom’
- Exploitation of workers
- Fluctuating prices year on year
What is fair trade?
Trade that focuses on partnerships and selling and buying within niche markets.
What does fair trade include?
- Sustainable organic produce
- Guaranteed price
- Ethical
- Products bought at higher prices
- Advocate for the vulnerable and offer legal support
- Dignified and equitable farmers have more leverage
- Limited impact on poverty reduction
