international trade access to markets

• costs of trading relationships? - global pattern of trade has great inequality with many developing countries having limited access to global markets

  - consequences for all countries involved - esp poorer
• benefits of trading relationships? - provides jobs + new tech

  - reduces prices for consumers -> food = cheaper

  - trade creates wealth + eliminates poverty
• how does trade help LDE's? - developing nations have increased share of global trade (now 50%)

  - greater access to goods at lower prices = essential for extreme poor
• How does differential access to markets affect cotton farmers in LDEs? - protectionist policies from developed countries stop Kenya from exporting cotton

  - hindering trade / development

  - US = largest exporter of cotton, given subsidies + use intensive farming

  - low productivity + poor infrastructure makes it harder for LDEs to develop
• Terms of trade: costs of goods that a country has to import compared with price at which they can sell the goods they export
• Why are terms of trade less favourable for LDEs? - prices of manufactured goods has increased, but prices of primary products has fluctuated

  - means LDEs have to import incr volumes of primary products to purchase manufactured goods required

  EG - between 1973 and 2012, price of raw materials has decreased 59%, whereas price of energy has risen 163%
• why might it be hard for LDEs to access trade markets? - they produce low value goods

  - risk of trade blocs benefitting some countries over others (due to unequal flows of money)

  - many aren't full members of WTO (only observer states)
• how trade affects wellbeing for developed countries: - increases wellbeing of blue collar workers in developed countries that rely on investment from india + china

  - apple shareholders in USA benefit from sales of goods made in china
• how trade affects wellbeing for emerging economies: - skilled chinese workers earn $600 a month producing devices, allowing chinese workers to develop rapidly
• how trade affects wellbeing for LESS developed countries: - quality of life = poor for farmers as agricultural trade is competitive

  - many developed countries tax agricultural imports to protect own farmers

  - affects wellbeing of LDC farmers as its harder to sell/trade
• What are Special and Differential Trading agreements? - in place to give LDCs preferential access to developed markets in trade agreements
• What are the problems with Special and Differential Trading agreements? - not all LDCs are members of WTO (takes 8-10 years to join after application)

  - doha agreement recognised SDT measures need to be made more effective + operational

  - some measures arent tailored to conditions in most LDCs
• What are the benefits to Mexico as part of a trade bloc/free trade agreement (NAFTA) and international trading organisations (OECD)? - opportunity to trade with fewer tariffs + so avoid import taxes

  - agreed regulations, standards + laws mean its a level playing field for all

  - cheaper goods incr market for contributing businesses, improving profitability + encouraging expansion
• How have differential access to markets impacted the Mexican people as different areas are affected by their trading relationships? - majority of FDI comes in + benefits north (economically stronger due to proximity to USA)

  - mexican gov = poor at collecting tax, so less money to redistribute + invest

  - top 10% in mexico have 36% of the wealth

  - obesity due to poor healthcare = big issue, cant work, affects health costs, lowers life expectancy
• How can access to services make markets more accessible to LDEs? - services can boost LDEs economies

  - reliable banks attracts investment

  - when 1 in 10 people have a phone in LDEs, estimated national earnings rise by 0.6%
• What is Fair Trade? - trade in which fair prices are paid to producers in developing countries

  - launched 1988
• benefits of fair trade: - access to health + education services

  - stabilises incomes

  - keeps value in source country (incr revenue for local economy)

  - helps improves livelihoods of farmers
• How does the example of El Guabo Small Banana Producers help people in LDEs? - since 2006, all M&S tea + coffee is fairtrade

  - introduced packing in kenya, generating more jobs and increasing export prices

  - adds value to product + profit stays in kenya

  - kenyan farmers get a premium -> allowing them to adapt / develop
• What are the differences between Fair Trade and Free Trade? FREE TRADE:

  - goal to increase nations economic growth

  - focusses on trade policies between countries

  FAIR TRADE:

  - goal to empower marginalised people + improve quality of life

  - focusses on commerce among individuals and businesses
• Why many countries are against Free Trade? fairtrade offers a more sustainable approach + allows vulnerable farmers to trade globally, whereas free trade only benefits larger companies