eco p 2

European Union

The most important trading bloc in the world economy, accounting for 20% of global merchandise trade.

Customs Union

An agreement where member countries adopt a common external tariff and allow free movement of goods among themselves.

Average external tariff in EU

5.9%, with a mode of 15%, meaning 47% of items have no tariff.

Free movement of labour and capital

A principle allowing workers and capital to move freely across member states in the EU.

EU Monetary Union

A group of EU countries that have adopted the euro as their common currency.

Benefits of EU membership

Includes free trade, attractive foreign direct investment (FDI), and a huge market size.

Costs of EU membership

Involves following EU laws, contributing to the EU budget, and potential trade diversion.

Bilateral trade agreement

A trade deal between two countries, which can lead to trade diversion.

Infant industry argument

Protection for new industries to help them establish and grow to compete internationally.

Dumping

A practice where firms sell goods at below production costs in another country's market.

Protectionism

Policies aimed at shielding domestic industries from foreign competition, including tariffs and quotas.

Tariffs

Taxes imposed on imported goods to protect domestic industries or generate revenue.

Subsidies

Payments given to domestic producers to lower production costs and enhance competitiveness.

Quotas

Limits on the volume or value of specific goods that can be imported.

Local content rules

Regulations mandating that products contain a certain percentage of locally produced parts.

Export incentives

Government programs that assist domestic producers in penetrating global markets.

Globalisation

The process of increasing economic integration and interdependence among countries.

Economic growth

The increase in a country's production output, often measured by real GDP.

Economic development

Improvements in well-being and quality of life within a country, beyond mere economic growth.

Human Development Index (HDI)

A composite statistic of life expectancy, education level, and per capita income indicators.

Gini coefficient

A statistical measure of income inequality within a population.

Millennium Development Goals (MDGs)

A set of eight international development goals established following the Millennium Summit of the United Nations in 2000.

Belt and Road Initiative

China's global development strategy to enhance trade and stimulate economic growth across Asia and beyond.

Trade diversion

The redirection of trade flows from more efficient producers to less efficient ones because of preferential trade agreements.

Most-favoured nation (MFN) clause

A standard of non-discriminatory trade that obliges countries to extend the same concessions to all other trading partners.

Free Trade Agreement (FTA)

An agreement between two or more countries to reduce or eliminate trade barriers.

OECD

The Organization for Economic Cooperation and Development, an intergovernmental organization with 38 member countries.

Foreign Direct Investment (FDI)

Investment made by a company or individual in one country in business interests in another country.

Trade surplus

When a country's exports exceed its imports.

Trade deficit

When a country's imports exceed its exports.

Gross National Income (GNI)

The total income of a country's residents and businesses, including any income earned abroad.

Purchasing Power Parity (PPP)

An economic theory that compares different countries' currencies through a market 'basket of goods' approach.

Tariffs vs. subsidies

Tariffs raise prices for consumers, while subsidies lower production costs for producers.

Economic integration

The process of reducing trade barriers between countries to encourage trade and investment.

Vertical specialisation

A process where goods are produced in different stages across various countries.

Services trade

Exchange of services between countries, often including education and technical services.

Natural resource endowment

The availability of natural resources that can be utilized for economic gain.

Skilled labour

Workers with specific skills or expertise, essential for economic development.

Political instability

The likelihood of governmental change with unpredictable effects on economic conditions.

Environmental sustainability

Responsible interaction with the environment to avoid depletion or degradation of natural resources.

Financial flows

Movements of money between countries for investments and market transactions.

Economic downturn

A decline in economic activity and performance in a country or region.

Trade liberalisation

The removal of trade barriers to encourage international trade.

Economic resilience

A country’s ability to recover from economic shocks.

Innovation

The introduction of new ideas, products, or processes that enhance efficiency and value.

Consumer surplus

The difference between what consumers are willing to pay and what they actually pay.

Dynamic efficiency

The ability of firms to innovate and adapt to changing market conditions.

Retaliation effect

The response of one country to another’s trade protection measures, often leading to trade wars.

International business cycle

The global pattern of economic growth and recession that affects trade and investments.

Trade flows

The movement of goods and services between countries.

Financial market deregulation

The removal or simplification of rules governing financial institutions.

Foreign currency reserves

Holdings of foreign currency by a country's central bank.

Economic strategy

A broader plan designed to improve a country's economic performance.

Manufacturing industries

Sectors involved in the production of goods, a vital part of trade and economy.

FTAs in China

China has engaged in numerous free trade agreements, expanding its international trade relations.

Open-door policy

China's strategy to attract foreign investment and integrate into the global economy.

Statistical measures of welfare

Indicators such as GDP, HDI, and Gini coefficient used to assess a country's well-being.

Self-sufficiency argument

The rationale for a country to maintain its own production capabilities for national security.

Global aid challenges

The obstacles faced in delivering effective aid to developing nations.

Phantom aid

Aid that does not fulfill its intended objective of improving the lives of the poor.

Maintaining trade position

Efforts by countries to sustain or improve their trading power and agreements.

Inflation-adjusted income

Calculating income while accounting for the effects of inflation.

Emerging economies

Countries experiencing rapid economic growth and industrialization.

Developed countries

Nations with high levels of economic development and living standards.

Global wealth distribution

The allocation of wealth among individuals globally, often leading to significant disparities.

Economic complexity

The breadth and depth of a country's productive capabilities and economic activities.

Welfare economics

The study of how economic policies impact social welfare.

Local market conditions

The economic environment in which local businesses operate, affecting their performance.

Trade relations

The economic and political connections between countries that influence trade.

Investment climate

The overall environment for foreign or domestic investment in a country.

Strategic industries

Sectors deemed critical for national security and economy.

Economic disparities

Differences in economic development, wealth, and opportunity among countries or regions.

Agricultural protectionism

Trade policies that protect domestic agricultural producers from foreign competition.

Regional trading blocs

Groups of countries that have formed a partnership to facilitate trade among themselves.

Trade facilitation

Processes and techniques that streamline and simplify international trade.

Global financial architecture

The international systems and institutions that govern global finance and investment.

Tariff barriers

Taxes imposed on imports that make foreign goods more expensive.

Market position

A company's standing in a particular market relative to its competitors.

Supply chain management

The oversight of materials, information, and finances as they move from supplier to manufacturer to wholesaler to retailer.

Long-term investment strategies

Plans designed to grow and leverage capital over an extended period.

Short-term financial flows

Capital movements that can be volatile and respond quickly to market changes.

Financial crisis

A situation in which the value of financial institutions or assets drops significantly.

Economic indicators

Statistics that provide information on economic performance.

Bilateral agreements

Deals made between two countries to facilitate trade or investment.

International trade law

Rules and regulations that govern trade between countries.

Economic decoupling

A situation where two economies become less reliant on each other.

Sustainable development

Development that meets current needs without compromising the ability of future generations.

Trade openness

The degree to which a country allows free trade with minimal restrictions.

Human capital investment

Expenditure on education and skills development to enhance productivity.

Financial volatility

Rapid fluctuations in financial markets that can lead to instability.

Consumer price index (CPI)

A measure of the average change over time in the prices paid by consumers for goods and services.

Limitations of trade policies

Constraints and challenges that trade regulations can impose on economic growth.

Income redistribution

The transfer of income, wealth, or resources from some individuals to others.

Global market trends

Patterns or directions in which the global economy is moving.

Investing in infrastructure

The allocation of resources to develop facilities and systems necessary for economic activity.

Exchange rate policy

Guidelines regulating a country's currency value against others.

Cultural influences on trade

The impact of cultural factors on trading relationships and agreements.

Digital economy

Economic activity that is conducted over the internet.

Market-driven policies

Strategies guided by market conditions and consumer behavior.

Foreign exchange market

A global marketplace for trading national currencies against one another.