Upload
byron-harper
View
24
Download
0
Embed Size (px)
DESCRIPTION
International Trade. BTEC Business. Look at the Trade W/S. What is a “Free Trade Zone”? What do they do? Where are they located? What’s good/bad about them? What are trading blocs? What are import tariffs and why are they used?. Trading Blocs. - PowerPoint PPT Presentation
Citation preview
http://www.bized.co.uk
Copyright 2007 – Biz/ed
International Trade
BTEC Business
http://www.bized.co.uk
Copyright 2007 – Biz/ed
Look at the Trade W/S...
• What is a “Free Trade Zone”?• What do they do?• Where are they located?• What’s good/bad about them?• What are trading blocs?• What are import tariffs and why
are they used?
http://www.bized.co.uk
Copyright 2007 – Biz/ed
Trading Blocs
• A trading bloc is where a group of nations agree to allow free-trade between themselves but impose tariffs (charges) on other countries who wish to trade with them (E.U).
• Some people believe these trading blocs are unfair to non-members as it is more difficult for them to trade.
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
EPZ’s And Free Trade Zones
• Export Processing Zones: Labour-intensive manufacturing centres that involve the import of raw materials and the export of factory products.
• Free Trade Zones: Where manufacturing does not have to take place for trading privileges to be gained (retailing).
http://www.bized.co.uk
Copyright 2007 – Biz/ed
Popularity Of EPZ’s...
• Problems of Indebtedness.• Open economies.• Multi-National Corporations to locate.
LEDC’s Offer...1.Trade.2.Investment (Big/Small).3.Taxation.
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
spendingLittle evidence that these policies work
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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
http://www.bized.co.uk
Copyright 2007 – Biz/ed
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