other facts

• merchandise

  all inward and outward movement of goods through a country (unequal), for example China imports over 1 million barrels of oil a day from Africa, and Asia has 40x more products exported than Africa (with 10x the value)
• services

  tradeable activities that require workforce skill, such as ICT. even present in LIDCs such as Sierra Leone (0.18 billion) and ACs, USA (662 billion). growing increasingly due to outsourcing
• outsourcing


  a cost saving strategy where a country with comparative advantage makes products at a cheaper price even though they couldve been made in house
• capital 


  wealth that is used to generate more wealth. real assets, that are tangible, including land (could also be financial). most flows of capital are within MNCs, and may also flow through global supply chains
• FDI


  foreign investement by an external country, also by TNCs. creates links between economies, for example India's FDI has allowed them to build an airport, and avoid tax through treaties with Singapore.
• inter-regional trade


  North America and Europe.

  trade machinary, electrics and aircraft, and account for 30% of global trade, they are the biggest trade partners, and trade provides lots of jobs. (explained by comparative advantage)
• intra-regional trade


  UK and Europe.

  food and drink federation, the UK relies on Europe for 75% of its imported food. Scotland provides France with salmon, England provides Spain with wheat.
• what factors may influence patterns of trade

  SOCIAL = demography (if all young like in Sierra Leone, maybe less workforce), human rights violations, women empowerment

  ENVIRONMENTAL = natural resources, natural hazards and climate

  ECONOMIC = FDI, cost to produce, cost to transport, technology and communications, level of infrastructure

  POLITICAL = tariffs, trading blocs, civil war
• Trade is interrelated, for example Scottish salmon for France is only made because it can be transported and produced easily (economic), there are few tariffs on trade (political) and there are no human rights violations preventing trade agreements (social)
• how migh trade improve an area?

  STABILITY = trade encourages co-operation (reducing political instability), can also reduce human rights violations (people won't trade with a country that has child labour)

  DEVELOPMENT = removal of tariffs, means trade is easier and poverty is reduced

  GROWTH = increased production results in increased investment and jobs in an area, multiplier effect.

  (also idea that people can return home with new skills and knowledge, such as engineers from China going to Silicon Valley)
• how might trade have negative consequences

  INJUSTICE = tariffs unfair for small scale fishermen, child labour, and landgrabbing

  INEQUAL = widens the development gap, poor still dont have access to ICT and communications

  CONFLICT = fights over tariffs, use of land (deforestation), government may become corrupt
• why is trade increasingly complex (6)

  growth in services, growth in MNCs and outsourcing, trading blocs, south to south trade, technology & transport & communications, the new international division of labour
• technology, transport and communications

  important for global supply and global value chains. there are issues, such as ethics, ensuring product quality and natural hazards.

  TRANSPORT = ease of movement, such as Felixstowe Port

  COMMUNICATIONS = ease of connection and ensures government accountability, e.g. Sub-saharan Africa less than 1 in 100 people have
• role of trading blocs

  inter-regional and intra-regional trade agreements that remove tariffs on trade. for example the EU (16% of world trade) has a trade defence policy to prevent price dumping from external countries and keep EU manufacturers safe, and a trade development policy to help LIDCs grow. trans-atlantic trade agreement has reduced tariffs and created jobs
• growth of services

  services grew by 6% in 2013, compared to merchandise's 2%. increases jobs (multiplier effect), investement, GDP and global value chains (services add 30% value to goods). for example, LIDCs being ICT locations
• growth in MNCs and outsourcing

  a company with comparative advantage produces goods. the top 500 MNCs account for 70% of flows of goods. they have HQs in ACs, and factories in LIDCs (e.g. JCB). for example, Bangalore accounts for 30% of India's IT industry. outsourcing creates jobs, increases skills, exploits people, risk of companies leaving (lack of stability as they find somewhere cheaper) and pollution
• south to south trade

  the increase in trade between LIDCs and EDCs, for example 50% of China's trade. due to there being a rising demand for their natural resources, realising their large customer market and demand from middle class. the poorest stay marginalised (such as Sub-Saharan Africa) as they lack economic diversity, have a low capacity and poor governance
• the increase in labour mobility and new international division of labour (NIDL)

  LABOUR MOBILITY = influenced by laws on migrants, prospect of higher wages, forced labour, border control and modern slavery.

  NIDL = reorganisation of labour in the last 40 years, for example ACs have become deindustrialised and increased MNCs, LIDCs have become more labour induced.

  JCBs biggest factory in India has reorganised to have better roads, access to markets and low labour costs.

  Due to globalisation and increasing connectedness