Nature of Trade

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  • Nature of trade and who controls it
    • The WTO established a series of trade agreements since the 1950s which have resulted in huge growth in trade and wealth
      • Removal of taxes and tariffs on imports
      • Removal of quotas on imports
      • Removal of subsidies for domestic producers
    • This has seen the growth of areas such as Asia, e.g. China and India but the decline in Africa's share of world trade as the international trade is mostly in the hands of TNCs who have decided not to invest in Africa and in Asia as they have developed free trade zones -attracts more investment
    • The idea of free trade for some countries is an illusion as trade takes place between trade blocs e.g. EU
    • Countries that are not a member of a trade bloc still have to pay tariffs and quotas etc.
    • Finally developed nations also control innovation and technology which are not shared with developing nations
    • 75% of fees/royalties go to three main powers, USA, EU, Japan

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