International Trade and Access to Markets

international trade

the exchange of money, goods, and services between countries

What was the approximate value of global trade in 2020?

US$19 trillion

Which country is currently the largest exporter of goods in the world?

China

What percentage of global Foreign Direct Investment (FDI) flows do Emerging Market Economies (EMEs) now receive?

more than 50% of global FDI flows

What is China's Belt and Road Initiative an example of?

Foreign Direct Investment (FDI) flows from Emerging Market Economies (EMEs)

Which countries in the past dominated global trade and investment?

Western countries (e.g., the USA, Germany, the UK)

What factors make Emerging Market Economies (EMEs) increasingly important to global trade?

• lower labour costs

• rapid economic growth, creating demand

• large and growing populations, creating new consumer markets

What type of commodities do Less Developed Economies mainly rely on for export?

primary commodities

What is dumping in the context of international trade?

when companies sell products at very low prices in foreign markets, often below the cost of production

What percentage of global copper imports does China account for?

over 40% of global copper imports

Which countries are the three largest sources of copper imports for China?

• Chile

• Peru

• Mexico

How has China's demand for metals affected African countries?

• invested heavily in African mining, such as in Zambia, to help meet its demand for metals

• leading to the development of new trading routes and relationships

What is the main driver of the dramatic increase in demand for metals?

Emerging Market Economies, particularly China

trade bloc

a group of countries that work together to increase trade and boost economic growth by reducing barriers to trade between member nations

What are some examples of major trade blocs?

• the EU

• BRICS

• the USMCA

• ASEAN

What is the main purpose of the World Trade Organization (WTO)?

• increase the volume of international trade

• promote free trade

• help to resolve trade disputes between member nations

What does SDT stand for in the context of World Trade Organisation (WTO) agreements?

Special and Differential Treatment

What is the EU's Everything But Arms (EBA) initiative?

an example of Special and Different Treatment that allows least developed countries to export all products (except weapons) to the EU without any tariffs or quotas

the Schengen area

23 European countries that have removed border controls allowing people and goods to move freely between countries

How many EU member states have adopted the Euro as their currency?

20

What was the result of the UK's 2016 referendum on EU membership?

• 52% vote to leave

• 48% vote to remain

What is a Transnational Corporation (TNC)?

a company that operates in multiple countries, locating their headquarters, production, and sales in different countries

Westernisation

the spread of Western cultures and ideas globally

vertical integration

when a company owns different parts of the supply chain (e.g., Starbucks is involved in every stage of its supply chain, from growing and processing coffee beans, to making and selling cups of coffee)

horizontal integration

when a company buys out rival companies at the same stage of production (e.g., Kraft's acquisition of Cadbury and later merger with Heinz)

outsourcing

when a company contracts work out to external suppliers, often in countries with lower labour costs

economies of scale

the cost advantages that a company gains when it increases the size and scale of its operations

What is the multiplier effect in the context of Transnational Corporations (TNCs)?

how the economic impact of TNCs can be amplified as money circulates through the local economy, creating additional jobs and economic activity beyond direct employment

What is Fairtrade?

a system that aims to pay a fair and guaranteed price for a product, improve working conditions, and pay a premium that is reinvested in the community

the global food system

all the activities involved in the production, processing, distribution, and consumption of food throughout the world

GM crops

crops that have been developed to increase yield and improve resistance to disease and drought

What percentage of soybeans in the USA are GM crops?

approx. 92%

drip irrigation

an advanced irrigation system that applies water directly to plant roots and can reduce water use by up to 60%

Which two countries are the largest producers of palm oil?

• Indonesia

• Malaysia

What percentage of all palm oil production do the two largest producers of palm oil account for?

more than 80%

What does RSPO stand for?

Roundtable on Sustainable Palm Oil

What percentage of global palm oil production is RSPO certified sustainable?

over 20% of global palm oil production