APHUG 7.4

Trade Overview

• Unit 7 Day 4: Introduction to concepts related to trade.

Quiz Preparation

• Students are encouraged to get ready for an upcoming quiz related to the unit's concepts.

Objectives of the Unit

• AP Standards 7.6, 7.7, and 7.8:

  • Explain causes and geographic consequences of recent economic changes.

  • Discuss the increase in international trade, deindustrialization, and growing interdependence in the world economy.

  • Relate sustainability principles to industrialization and spatial development.

Warm-Up Activity

• Definitions Required:

  • Fordism: Mass production model.

  • Post-Fordism: Flexible, adaptable production methods.

• Advantages of Post-Fordism in the 21st-century economy: Focus on teamwork and problem-solving among workers.

Fordism vs. Post-Fordism

• Fordism:

  • Characterized by mass production in a single location (e.g., assembly lines).

  • Workers are assigned narrow roles in the production process.

• Post-Fordism:

  • Focuses on flexible production methods and innovation.

  • Encourages teamwork and outsourcing of certain jobs.

  • Production is distributed globally.

Rostow’s Modernization Model

• Five stages of development outlined by Walt Rostow:

  1. Traditional Society: Dominated by subsistence farming.

  2. Preconditions for Takeoff: New leadership fosters diversification.

  3. Takeoff: Similar to an Industrial Revolution with sustained growth.

  4. Drive to Maturity: Diffusion of technologies and industrial specialization.

  5. High Mass Consumption: High incomes and widespread production.

Alternative Theories of Development

• Neocolonialism: Rich countries control poorer countries economically despite political independence.

• Structuralism: Large-scale economic arrangements dictate development capabilities.

• Dependency Theory: Examines the influence of global political/economic relationships on development possibilities.

World Systems Theory

• Developed by Immanuel Wallerstein, focusing on the spatial (geographical) and temporal (historical) dynamics of global economies.

• Three-tier structure:

  1. Core: Wealth-generating countries.

  2. Periphery: Economically weaker countries.

  3. Semi-periphery: Mix of both, acting as a buffer.

Globalization

• Definition: Increasing interactions across borders and the interdependence that results.

• Capitalist dynamics driven by both consumer demands and producer responses.

• Concepts of commodification and vertical integration.

Global Division of Labor

• Labor often concentrated in periphery and semi-periphery regions for cost efficiency.

• Core regions mainly focus on Research and Development (R&D).

• Concepts of time-space compression and just-in-time delivery practices.

Commodity Chain Stages

• Stages include:

  • Raw materials

  • Manufacturing and assembly

  • Distribution

  • Market locations

• Different modes of transportation (rail, maritime, road) and their implications for costs.

Global Production Networks

• The commodity chain model is too simplistic; a focus on global networks instead of just individual chains is essential for understanding product distribution.

Case Study: Nike

• Nike illustrates the shift in manufacturing strategy due to globalization and just-in-time production methodologies.

Global Trade and Government Roles

• Government regulations can impact production costs (environmental laws, minimum wage, etc.).

• Strategies such as deregulation to attract businesses, regional trade agreements (e.g., ASEAN, USMCA).

Special Economic Zones (SEZs)

• SEZs provide tax and regulatory advantages to attract foreign investment.

• Typically situated near major ports and aimed at low-skill manufacturing operations.

Economic Impacts of Deregulation

• Deindustrialization: Movement of jobs from industrial sectors, affecting core countries.

• Example: Movement from Steel Belt to Rust Belt in the U.S.

Service Economy Transition

• Technologies like GIS help identify optimal locations for new businesses.

• Quaternary sector services show a diverse range of locational influences.

High-Technology Corridors

• High-tech corridors aim to attract IT designers and tech firms, evidenced by Silicon Valley's growth.

• Technopol: A planned area for high technology companies, fostering synergy and innovation.

Sustainable Development Goals (SDGs)

• Overview of the 17 SDGs, including goals addressing poverty, hunger, health, education, and climate action.

Tourism as a Development Strategy

• Tourism's growth within the global economy, which now surpasses oil in economic value.

• Negative impacts on local communities and infrastructure due to tourism development.

Ecotourism

• Defined as sustainable tourism aimed at minimizing environmental impact.

• Challenges include dependency on tourism revenue and potential environmental degradation.

Examples of Ecotourism

• Costa Rica: Promoting sustainable practices while gaining economic benefits.

• Nepal: Example of a region promoting ecotourism.