patterns of trade

Inter-regional trade; Europe & North America

  • Long established trade relationship between these two continents 

  • Transatlantic Trade & Investment Partnership (TTIP):

    • Removed trade barriers by lowering tariffs which promoted trade and encouraged economic growth 

    • The UK benefits from the agreement and has its own bilateral trade agreements with each of the 3 NAFTA members (USA, Canada, Mexico) 

    • Strong level of interdependence- main single country export market for each other 

    • Main exports from USA to UK and UK to USA are similar forms of manufacturing – machines, engines, pumps, vehicles, aircraft, pharmaceuticals 

    • Include finished products and component parts 

    • Goods which each country specialises in or are most efficient at manufacturing – represents principle of comparative advantage. 

Intra-regional trade; EU

  • Trading bloc with 27 members states

  • 2013 value of intra-EU trade in merchandise was €2935 billion and in services was €842 billion 

  • Complex pattern due to high level of interconnectivity of transport networks and the relative ease of financial transactions within the Eurozone:

    • single market economy,

    • trade defence policy which protects domestic industries,

    • lack of internal tariffs between members

    •  increasing number of EU MNCs operating within the trading bloc

Wide range of raw materials, minerals, agricultural products, manufactured goods and commercial services are produced

Since joining in 2007 Romania’s total value of exports has increased each year. In 2015 it’s largest trading partners were Germany, Italy & France 

Large demand from the 520 million population 

UK food and drink sector:

  • 2014 UK exported 75% of its food & drink products to other EU states- milk to Ireland, wheat to Spain 

  • UK specialism possible due to physical conditions, human expertise, government & private investment in marketing, free trade within EU, technology to transport perishable goods over long distances 

Factors that influence patterns of international trade 

Economic

  • Physical infrastructure inc. transport

  • Technology inc. communications

  • Transport costs

  • Production costs

  • FDI

  • Speed of border formalities 

Social 

  • Demographic factors affecting labour and import demand 

  • Stage of demographic transition

  • Female empowerment

  • Levels of education

Political 

  • Supranational organisations

  • Regional trading blocs

  • National government policy 

  • Trade agreements 

  • Tariff/non-tariff barriers

  • Free trade areas

  • Transparency of customs authorities 

Environmental 

  • Distribution of natural resources 

  • Climate

  • Soil fertility 

  • Water scarcity 

  • Deep water ports

  • Natural hazards 

The factors that affect the pattern of international trade may vary in their importance for different countries and depending on what his being traded. 

Environmental factors remain very important for countries which export primary products e.g. Oil/Gas or agricultural products e.g. crops and fruits/vegetables. 

Physical factors remain very important for the trade of merchandise (physical products), as being able to move products from one place to another easily is vital. 

Social/Economic factors are more important for the trade of services and capital such as the investment in internet access and level of education of the workforce.