Global Flows (DP IB Geography)
Revision Note
Materials, Goods & Services
Places are interconnected by a range of flows; some are beneficial, some are exploitative and some are illegal
Many stakeholders are involved and their power varies from place to place
Growth of world trade
Since 1995, world trade volume and value have expanded on average by 4% and 6%, respectively
The COVID-19 pandemic affected global trade, which shrank by 8.9% and had a serious effect on shipping costs, which has continued to increase by 350% since May 2020
In 2022, the global trade of goods exported throughout the world was valued at US$24.9 trillion and had risen to pre-pandemic levels in 2019
According to the World Trade Organisation, merchandise trade volume grew by 1.7% in 2023 and is expected to reach 3.2% in 2024
North America, Europe and Asia continue to account for the bulk of trade
However, trade (imports and exports) in goods increased more strongly in developing countries than developed countries, increasing by 31% between 2019 and 2022, with exports up by 41% over that period
Services
The services share of world trade has grown from 9% in 1970 to over 20% today
Services could account for up to one-third of world trade by 2040—a 50% increase in just twenty years
Developed economies shift from goods to services, with services exports comprising 28% of total exports as of 2016
Developing economies are increasing their participation in global services trade, with their services exports growing from 14% to 17% of total exports from 2005 to 2016
China, India, Hong Kong, and South Korea continued to be the market leaders in commercial services
China has a strong manufacturing base, large domestic market, and significant investment in technology and infrastructure
India has a large English-speaking population, expertise in IT and software services and competitive labour costs
Hong Kong is a strategic location for trade. It has robust financial and legal systems and is a gateway to mainland China's market
South Korea has an advanced technology sector, highly educated workforce and government support for innovation and R&D
Digital services emerged as an important source of growth, accounting for 54% of global services exports in 2022 and 12% of total global trade in goods and services
Developed economies export $2.996 trillion and developing economies $946 billion in such services, for a growth rate of 12.6% in 2022
Within developing countries, travel and tourism account for the majority of commercial services
Merchandise trade
Exports of goods and services from least-developed countries (LDCs) increased by 31% between 2019 and 2022
China was the top exporter of merchandise trade in 2022, accounting for 13% of the world’s total (worth $4,000 billion)
2nd was the United States at $3,500 billion
3rd was Germany with $2,500 billion
Total world merchandise exports were valued at $24.9 trillion in 2022
Trade in goods and services totalled $31.0 trillion in 2022
Examiner Tip
When writing about trade, remember to distinguish between imports and exports. Exports are when a country sends goods and services elsewhere, and imports are goods entering the country. From an economic point of view, it is better to have more exports than imports, making the trade balance of an economy healthier and improving the lives of the people in that country.
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