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

Major Trade Blocs

• Trade blocs provide members with greater access to a larger market by reducing barriers to trade between member nations

• Members of trade blocs can trade and develop more easily because they can sell larger volumes of goods without needing to pay tariffs to access the market

• Trade blocs that are made up largely of HDE countries like the EU have lots of wealthy consumers which leads to increased sales

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

• LDE countries may struggle to access these large and wealthy markets because they cannot afford to pay high tariffs

• Examples of major trade blocs include the EU, the USMCA and ASEAN 

Trade Organisations

World Trade Organisation (WTO)

• The WTO was set up to:

  • Increase the volume of international trade by promoting free trade 

  • Help to resolve trade disputes between member nations

• It encourages member nations to reduce barriers to trade by removing tariffs and quotas

• Its goal is to accelerate economic growth and development and to improve standards of living

• It has over 160 member nations and accounts for 98% of global trade

• The WTO creates Special and Differential Treatment (SDT) agreements these:

  • Help LDE countries achieve economic growth by giving them greater market access

• An example of an SDT is the EU’s Everything But Arms (EBA) initiative which allows least developed countries to export all products (except weapons) to the EU without any tariffs or quotas

• SDTs have been criticised for allowing cheap imports into HDE countries which could undermine local businesses

Membership of the EU

• The EU is one of the world’s largest trading blocs

• The EU was set up in the 1950s to increase trade and economic growth in the 6 member nations

  • Creating greater interdependence 

  • Reducing chances of conflict

• It has expanded over time, reaching a peak of 28 members before the UK left the bloc in 2020 (Brexit)

• The EU increases socio-economic and political integration in several ways:

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

  • Free movement of people has allowed more than 13 million people with citizenship from one EU country to live in another EU country

  • The Euro is the EU’s single currency which has been adopted by 20 member states making it easier and quicker to trade

Brexit

• After a referendum in 2016, the UK voted to leave the EU - a vote of 52% (leave) to 48% (remain)

• The UK formally left the EU on 31st December 2020

• There were many arguments for and against leaving the EU

Arguments For and Against the UK Leaving the EU

Differential Access to Markets

Impacts of Differential Access to Markets