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International Trade

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International Trade

International Trade

Published in: Business

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  • 1. International Trade BTEC Business
  • 2. Trade Barriers
    • the EU’s internal market is about removing barriers to free movement of goods, services, people and capital
    • the flow of goods and services in the world economy is also important
    • organisations have been set up to encourage the removal of barriers to free global trade
  • 3. Why the stress on free world trade?
    • The world economy went into a deep depression in the 1930s, as many countries closed their barriers to trade with other states. This led to:
    • Mass unemployment
    • Social upheaval
    • Rise of fascism and the Second World War
  • 4. How to prevent chaos happening again?
    • Global powers set up bodies to support international trade
    • International Monetary Fund
    • World Bank
    • All countries encouraged to join these organisations, or face exclusion from benefits of free world trade
  • 5. What do the IMF and World Bank do?
    • IMF:
    • Lends to countries with balance of payments problems
    • Pushes for economic reforms
    • Reports on policies in member states
  • 6. What do the IMF and World Bank do?
    • World Bank:
    • Aims to help development by advising and lending – with many conditions
    • Countries encouraged to lift import and export barriers, cut subsidies and remove price controls
  • 7. Criticisms of IMF
    • IMF only lends money if countries agree to:
    • Sell their resources cheaply
    • Cut public spending
    • Critics say this serves to increase the problems of poverty in poor member countries
  • 8. Criticisms of World Bank
    • Loans depend on countries agreeing a ‘Structural Adjustment Programme’
    • Leads to rapid increase in price of goods in country
    • Increases poverty
    • Lower investment and cut social spending
    • Little evidence that these policies work
  • 9. What about the World Trade Organisation (WTO)?
    • The WTO deals with the rules of trade between countries
    • It developed from the General Agreement on Tariffs and Trade (GATT)
    • WTO agreements set the ground rules for international commerce
  • 10. Why so much outrage over globalisation?
    • Other than the criticisms raised earlier, opponents of globalisation point to:
    • Falling share of world trade taken by developing countries
    • Subsidies and tariffs set by rich developed economies: USA steel tariffs, EU agricultural subsidies are two of the culprits