13.1 - Global trade UNFINISHED

Define trade

Exchange of goods, money, and services between countries and regions

define visible and invisible trade

visible - exchange of physical goods

invisible - exchange of services

define commodities

raw materials/basic goods

e.g. minerals, oil, gas, agricultural products

define trade deficit

imports are greater than exports

define trade surplus

exports are greater than imports

three main global trade pathways

• between HICs, North-North trade

• between HICs and LICs, North-South trade

• between LICs, South-South trade

why is most trade still between HICs

• large consumer market

• high purchasing power

• advanced manufacturing

• efficient transport infrastructure

• trade blocs: 60% of the EU’s trade is internal

MICs’ usual role in global trade

export manufactured components and consumer products to HICs

e.g. China is the workshop of the world, largest exporter of goods due to highly integrated global supply chains

LICs’ usual role in global trade

dependent on exporting primary commodities, lacking manufacturing infrastructure to get value added

why has China become the dominant trading partner for many countries, replacing the USA (3)

• rapid industrialisation to become a major manufacturing power

  • attracted TNCs with cheap available labour and SEZs

• more complex supply chains, increasing chance of China being involved

• running out of raw materials, increased imports from S. America and Africa

examples of 3 LICs and their primary commodity export to China

Oil - Angola

Copper - Zambia

Iron ore - South Africa

key global chokepoints

strait of hormuz (persian gulf)

straits of malacca (malaysia)

suez canal

panama canal

bab el-mandeb strait (yemen)

biggest exporter of wheat

Russia

biggest exporter of cotton

USA

biggest exporter of soybeans

Brazil

biggest exporter of tea

Kenya

biggest exporter of coffee

Brazil

biggest exporter of cacao

Ghana