First 541 words of the document:
UK- A country that trades with other countries
The UK is the 5th biggest trading nation of goods and the 2nd biggest trading nation of services. Since 1983 however
it has had a negative balance of trade as imports exceeds exports.
Pattern of Trade
i. Very few primary products due to resource exhaustion, the climate not being suitable for many products e.g.
bananas, coffee beans etc. and the fact that it is cheaper to import many primary products.
ii. The UK is the 5th biggest exporter of manufactured goods, including hi-tech high value products.
iii. The UK is the 2nd biggest exporter of services such as insurance. London is said to be insurance `capital' of
i. Imports are mainly manufactured products. Mostly consisting of low value labour intensive products which
are made out of the UK due to cheap labour.
ii. The UK also imports primary products because they are cheap to import and are needed for manufacturing.
The UK mostly trades with other MEDCs. The UK's biggest single trading partner is the USA which accounts for 15% of
The biggest trading bloc (group of countries) the UK trades with is Europe which accounts for over half (>50%) of
trade. There are no trade barriers, quotas or paper work so it countries within the EU are easy and quicker to trade
with. The countries are close together in the EU so there are cheaper transport costs which mean companies obtain
The UK does not trade a lot with LEDCs as they cannot afford hi-tech products or expensive services.
However recently the UK's imports to Europe have decreased and imports to newly industrialising countries in Asia
such as China have increased.
Impacts of Trade
i. Exports are high value manufactured products and expensive services which values steadily rise and rarely
fluctuate. The income is reliable and allows steady growth of economy and allows high GDP. The high income
enables the country to invest in services, infrastructure and education, allowing country to achieve high level
ii. Good trade links including freedom of trade within EU allows the UK to trade lots of products and services to
earn a high income so the economy grows quickly.
iii. However UK imports much more than it exports which means it has a negative balance of payments. This
means the country is in debt. This means the country's economy grows slower and the country must spend
money paying back the debt rather than spend the money on developing the country so the development of
the country slows.
iv. The UK makes most of its income from exports of financial services. During the current economic crisis,
however, people fear that the UK will lose out on much of its market. As the economy is fairly dependent on
this sector the economy will be severely affected and growth will slow considerably. Some people argue
that the country needs to have a more diverse economy to make it more stable.