Your SlideShare is downloading. ×
0
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Is world trade fair?
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Is world trade fair?

1,429

Published on

Published in: Business, Lifestyle
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,429
On Slideshare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
0
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. Is world trade fair?
  • 2. • LEDCs – export of primary products • minerals (oil, iron ore) • foods (cocoa, coffee) – low in value • MEDCs – export high-tech manufactured goods – high in value
  • 3. Problem 1: Who is in control? • Value is added when primary products are made into other goods (manufactures) in factories, usually controlled by MEDCs. – factories located in MEDCs – Transnational corporations(TNCs)
  • 4. Problem 2: Fluctuating prices • World prices of raw materials fluctuate -they go up and down like a yo-yo • Producers never know how much money they are going to make –or not going to make. World coffee prices, 1972-2002
  • 5. Problem 3: Intermediaries • Producers don’t receive the full price we pay for their products in MEDCs • Shipping, storage and distribution increase the value of these products, but their benefits do not reach the growers.
  • 6. Why do LEDCs stick to primary goods? • Money from exporting crops is an important source of income for many LEDCs • Finding other ways of earning foreign exchange is difficult
  • 7. Think! Using the sources (B) answer: What problems are caused by poor countries being paid so little for their exports?
  • 8. Think! (2) Using the sources (C) answer: Why it is difficult for developing countries to get out of the “trade trap”?
  • 9. Trouble to sell… • MEDCs’ governments have tried to regulate overseas trade creating trade barriers • They hope this will protect jobs and industries in developed countries
  • 10. India- UK 19th Century India: UK colony Cotton cloth exported to India Imported raw cotton made into cloth Imported cotton cloth manufactured in UK Grew cotton to export Raw cotton exported to UK
  • 11. India- UK 20th Century Indian cotton cloth was more expensive than UK cotton so British bought UK cotton UK put a tariff on indian cloth to protect its industries Independent India (1948) Exported cheap cotton cloth to UK Grew cotton and decided to make its own cotton cloth
  • 12. Trade barriers To reduce the cost of imports and protect both domestic raw materials and manufactures, MEDCs governments use: – Tariffs: a customs tax charged on goods imported from other countries, usually to put up the price of imported goods making them more expensive and therefore harder to sell – Quotas: a limit in the amount of goods that can be imported. They tend to be restricted to primary goods so work against LEDCs – Subsidies: are grants of money given by a government to maintain the price of a specific industrial or agricultural product. This reduces the cost of goods produced in MEDCs making them more competitive against LEDCs’ products
  • 13. Restriction TARIFF QUOTA SUBSIDY Definition Effect It makes imports more expensive so people do not buy them –so they consume local products A limit on the It makes people buy goods amount of from their own country or goods imported trade bloc A tax on imports A government The subsidised industry gives money continues to survive so jobs to support an are not lost industry

×