Theme 4 - Trade
- Created by: LukeKeogh
- Created on: 03-05-19 09:32
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- Theme 4 (Trade)
- Trade Liberalisation
- Reduction or removal of global trade barriers
- Benefits
- Creates opportunities for business
- Consumers benefit as liberalised trade can help lower prices and broaden the range of quality goods and services available
- Cons
- LEDC's can be vulnerable to the power of MNC's
- Free trade does not equal fair trade
- Globalisation
- Factors influencing
- Political change
- Increased global politics has led to more countries working together for mutual benefits
- Reduced costs of transport
- Containerisation
- Reduced fuel costs
- Communication – Television, mobile phone technology and the internet have allowed information and ideas to travel quickly
- Increased significance of MNC's
- Political change
- = increased global free trade
- FREE TRADE DOES NOT EQUAL FAIR TRADE
- Factors influencing
- Trade Barriers
- Tarriff
- A tax placed on an import to increase its price and decrease its demand
- Pros
- Means domestic goods will become competitive as they'll be cheaper than imported goods
- Can protect new infant businesses from being swamped by international competition from MNCs
- Reduces imports so improves balance of trade
- Cons
- Raised price may not put consumers off (depends on PED)
- RETALIATION
- Quota
- A limit on the quantity of a good imported or exported
- Pros
- Outcome is more certain and precise
- Easy to implicate and then remove after
- Cons
- Less exporting opportunity for all producers and higher prices for all consumers
- RETALIATION
- Tarriff
- Trading blocs
- Intergovernmental agreement to reduce trade barriers
- Pros
- Free trade
- More customers
- Protection from international competition outside of the bloc
- Cons
- Retaliation – other blocs may be created as a result
- Trade Liberalisation
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