Trade and globalisation

IMF

Provides loans to governments to stabilise the economy

World bank

Provides loans for development

1948 GATT

An agreement on tariff reduction and agricultural subsidies

Allows textiles and clothing from LICs

2001 Doha development Round

WTO negotiations to lower trade barriers and revise trade rules

Containerisation

Began in 1960s, allows mass movement of goods at low prices largest ever is MSC Irina and it can hold over 24,000 TEUs

Trade blocs

Intergovernmental agreements to reduce trade barriers such as ASEAN (association of south East Asian nations) and the EU

Pros of trade blocs

Bigger markets without extra taxes

Merging to form TNCs to lower production costs and increase profit

Protection of domestic manufacturing from foreign competitors e.g. bra wars between china and eu in 2007

Cons of trade bloc membership

Loss of sovereignty as countries are impacted by bloc policies which aren’t trade related

interdependence can have consequences in the event of trade disruption

Countries must concede to foreign firms at local companies’ expense for consumer benefit

Sovereignty

Control over territorial affairs