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
      • = increased global free trade
      • FREE TRADE DOES NOT EQUAL FAIR TRADE
    • 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
    • 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

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