International Trade & Access to Markets (AQA A Level Geography)

Most trade takes place between HDE countries because they:

• Specialise in high-tech products.

• Have wealthier populations with more disposable income.

• Are more likely to have trade agreements.

• Have better infrastructure.

EME countries are becoming more important to global trade due to:

• Lower labour costs.

• Rapid economic growth creating demand.

• Large and growing populations creating new consumer markets.

False.

Less Developed Economies mainly trade with Emerging Market Economies and Highly Developed Economies.

Less Developed Economies rely mostly on the export of primary commodities.

Dumping is when companies sell products at very low prices in foreign markets, often below the cost of production.

China accounts for over 40% of global copper imports.

False.

China's demand for copper causes global copper prices to fluctuate as demand in China rises and falls.

The largest sources of copper imports for China are Chile, Peru and Mexico.

China has invested heavily in African mining, such as in Zambia, to help meet its demand for metals. This is leading to the development of new trading routes and relationships.

The dramatic increase in demand for metals is driven mostly by Emerging Market Economies, particularly China.

A trade bloc is a group of countries that work together to increase trade and boost economic growth by reducing barriers to trade between member nations.

False.

Trade blocs retain common barriers to trade (such as tariffs) for countries outside of the bloc, reducing their access to the market.

Examples of major trade blocs include:

• The EU.

• The USMCA.

• ASEAN.

The main purpose of the WTO is to increase the volume of international trade by promoting free trade and helping to resolve trade disputes between member nations

SDT stands for Special and Differential Treatment.

The EBA initiative is an example of Special and Different Treatment that allows least developed countries to export all products (except weapons) to the EU without any tariffs or quotas.

False.

The EU had 28 members before the UK left the bloc in 2020 (Brexit). It now has 27 members.

The Schengen area consists of 23 European countries that have removed border controls allowing people and goods to move freely between countries.

There are 20 EU member states that have the Euro as their currency.

The result of the UK's 2016 referendum on EU membership was 52% vote to leave and 48% vote to remain.

A Transnational Corporation (TNC) is a company that operates in multiple countries, locating their headquarters, production and sales in different countries.

True.

80% of global trade is linked to TNCs.

Westernisation refers to the spread of Western cultures and ideas globally due to the dominance of Western-owned TNCs.

Vertical integration is when a company owns different parts of the supply chain, e.g., Starbucks is involved in every stage of its supply chain, from growing and processing coffee beans to making and selling cups of coffee.

Horizontal integration is when a company buys out rival companies at the same stage of production, e.g., Kraft's acquisition of Cadbury and later merger with Heinz.

False.

TNCs often locate their headquarters and Research and Design functions in Highly Developed Economies (HDE) where there are large supplies of highly educated and skilled workers.

Outsourcing is when a company contracts work out to external suppliers, often in countries with lower labour costs.

Economies of scale are the cost advantages that a company gains when it increases the size and scale of its operations.

False.

TNCs can have both positive impacts (e.g., job creation, FDI) and negative impacts (e.g., environmental degradation, exploitation of workers) on the countries they operate in.

The multiplier effect refers to how the economic impact of TNCs can be amplified as money circulates through the local economy, creating additional jobs and economic activity beyond direct employment.

Fairtrade is a system that aims to pay a fair and guaranteed price for a product, improve working conditions, and pay a premium that is reinvested in the community.

False.

Bananas are one of the most produced, traded and consumed fruits in the world.

Three major TNCs that dominate the global banana trade are Chiquita, Dole, and Del Monte.

Vertical integration in the banana trade refers to TNCs controlling the entire supply chain, from the growth of the bananas to transportation and marketing.

True.

Bananas are UK's most popular Fairtrade product, accounting for over 40% of bananas sold.

More than 90% of bananas for export originate from Central and South America and the Philippines.

Positive impacts of the banana trade include:

• The creation of employment opportunities.

• Nutritional benefits.

• Export earnings.

• Development of infrastructure.

Negative impacts of the banana trade include:

• Extensive use of chemicals such as pesticides and herbicides.

• Use of artificial fertilisers.

• Exploitation of workers.

• Child labour.

Fairtrade has significantly benefited banana farmers in the Windward Islands by enabling them to receive above market value for their crops when before they struggled to make a living.

False.

Fairtrade requires farmers to use sustainable farming practices to protect the environment. For example, in the Windward Islands, Fairtrade farmers have reduced their pesticide use by 50%.

The global food system encompasses all the activities involved in the production, processing, distribution and consumption of food throughout the world.

False.

The global food system is dominated by a small number of Transnational Corporations (TNCs) that control everything from seed production to food retail.

Approximately, 36% of the world's grain production is used for animal feed.

GM (Genetically Modified) crops are crops that have been developed to increase yield and improve resistance to disease and drought.

Approximately, 92% of soybeans in the USA are GM crops.

Drip irrigation is an advanced irrigation system that applies water directly to plant roots and can reduce water use by up to 60%.

False.

It is estimated that around half of all packaged products sold in supermarkets contain palm oil.

Indonesia and Malaysia are the largest producers of palm oil, accounting for more than 80% of all palm oil production.

RSPO stands for Roundtable on Sustainable Palm Oil.

RSPO certified sustainable palm oil now accounts for over 20% of global palm oil production.