Trade

• Imports are products bought from another country
• International trade involves the exchange of goods or services between two or more nations. This can be done through imports and exports.
• National governments help to get rid of trade barriers, improving trade between nations.
• Technological advancements that have facilitated international trade

  • Better transportation
  • Communication
• Restrictions on trading products

  • Tariffs (a tax for importing and exporting goods)
  • Non-tariff barriers (NTBs) such as quotas or requirements
  • Outright bans on products or country import/exports
• Free-trade has increased globally due to deregulation, allowing global markets to thrive and decreasing the risk of conflicts
• The economies of LICs can develop through technology investments, opening up factories and increasing employment, strengthening trade deals between HICs and LICs
• Unequal power relations affect global systems

  • The environment
  • Trade
• Examples of unfair practices in international trade

  • The maintenance of (some say unfair) high import duties and quotas in rich countries, which reduces imports from developing countries
  • The protection of HIC agriculture, but the pressure for LICs to open their markets up to international produce
  • Developing countries are not represented as much in the WTO
• International trade is occurring more than ever before
• The only time trade has decreased was during the Global Financial Crisis
• Global trade and investments have changed over the past 40 years
• Trading and investments used to be heavily concentrated within the most developed countries
• Developing economies' share of world merchandise trade is currently at 41%
• Low income countries are trading more, but the growth at which LICs trade is the slowest out of every economy
• International trade is changing due to new international relationships, including fair trade and trade blocs
• Trading relationships between high income, middle income (NEEs), and low income countries generally follows the same pattern
• The Fairtrade Foundation was set up in 1992 to ensure producers receive better trading conditions
• Some criticise that trading blocs limit trade to other countries, causing disadvantages to both the countries within the trade bloc and those outside of it
• Trade blocs are said to limit the access to markets
• Access to markets

  A nation or company's ability to trade within the international market
• Factors impacting access to markets

  1. Trade agreements can positively and negatively affect countries

  2. A country's access to markets may be improved by trade agreements, as relationships between countries are created that allow more trade to occur
• Some argue that trade agreements disallow countries within them to trade as well with other countries, which may negatively affect these countries
• The UK decided to leave the EU partly because the EU limits trading with other countries
• Many trade blocs and agreements are made up of primarily core regions


  They develop quickly and benefit the most
• Special Economic Zones (SEZs) are areas within a country that do not have the same trading regulations as the country they are located in
• Special Economic Zones (SEZs) increase access to markets


  Countries can afford to invest in the area, increasing international trade from that area
• Special and Differential Treatment (SDT) agreements


  • Include reduced tariffs and taxes, priority in trading, etc.
• The majority of TNCs trade with HICs as the market for consumer goods is concentrated in richer countries. However, there is a rapid increase in demand for popular brands in emerging economies such as Latin America, East Asia, and the Pacific
• TNC trading has increasingly expanded to countries
• Trade agreements set by the WTO affect how trading happens internationally, for example in the EU
• The Department for International Trade decides what products the UK imports from where
• Types of trade agreements

  • Free trade areas
  • Economic/monetary unions
• Trade deals are assessed by looking at how successful they are in reducing barriers
• Trade can be used as a weapon in conflict

  e.g. 2006: UN Security Council imposed trade sanctions against Iran for refusing to suspend uranium enrichment nuclear programme
• Barriers to trade and protectionism

  • Import licence
  • Import quotas
  • Subsidies
  • Voluntary export restraints
  • Embargoes
  • Trade restrictions
• In 2013, the value of world trade in merchandised goods was US$18.8 trillion and services were US$4.6 trillion
• In 2020, the value of world trade in merchandised goods was US$35 trillion and services were US$6 trillion
• Fair trade is a social movement aiming to help producers in developing countries achieve better trading conditions and promote sustainability
• Fair trade mainly focuses on agricultural-based products like coffee, tea, cocoa, etc.