Visible Imports: Physical goods which are imported into a country. Visible exports: Physical goods which are exported.
Invisible imports: services (whatever you cannot touch is invisible eg: interests, funds inflows…) which enter a country. Invisible exports: services provided by your country.
Balance of trade: income gained from visible exports- costs in paying visible imports. Balance of payments: balance of trade including invisible earnings or costs.+
Trade surplus: earn more from exports than you lose from imports. Trade deficit: earn less from exports than you pay from imports.
----Global inequalities in trade flows: awareness needed.?!?!?!?
Factors affecting global trade:
-Locational advantage: countries which are closer to each other can trade between them easier as they might spend less on transport costs, resulting in being cheaper to trade. -Historical factors: eg of colonial ties: UK with Canada , Australia, India, etc.. -Trade agreements: RTA (Regional trade agreement) eg: EU. There are groups which share economical and economical opinions/aims. The largest ones are: EU, NAFTA. -Changes in the global market:?!?!?!?
GATT and the World Trade Organization
GATT: General Agreement on Trade and Tariffs and its aim is to reduce tariffs and provide a forum for discussing problems of international trade. Two main issues: -EU and USA had strong farming subsidies (difficult for LEDCs to export). - Japan and remainig G7 had discussions over tariffs. In 1995 GATT was fucked and replaced by the WTO(World Trade Organization) WTP serves interests of developing countries in four ways (reasons why LEDCs became members): 1-facilitates trade reforms
2-provides a mechanisms for settleling disputes.
3-strengtheness the credibility of trade reforms.
4-promotes transparent trade regimes that lowers transaction costs.
Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries obtain better trading conditions and promote sustainability. The movement advocates the payment of a higher price to producers as well as social and environmental standards. It focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate and flowers.
1- provide market access to otherwise marginalized producers, connecting them to customers and allowing access with fewer middlemen (person between producer and consumer). 2- It aims to provide higher wages than typically paid to producers as well as helping producers develop knowledge, skills and resources to improve their lives. 3- advocates also seek to raise awareness of the movement's philosophies among consumers in developed nations. 4- Fair trade products are traded and marketed either by an "MEDC supply chain" whereby products are imported and/or distributed by fair trade organizations (commonly referred to as alternative trading organizations) or by "product certification" whereby products complying with fair trade specifications are certified by them indicating that they have been produced, traded, processed and packaged in accordance with the standards.
One of the greatest problems faced by less developing world countries is their level of foreign debt. By struggling to pay debt countries cannot invest in education, medical care, transport route and are often giving up more of their raw materials as pay off. Many countries particularly in Africa owe staggering amounts of money.
Causes of Debt
* The legacy of colonialism — for example, the developing countries’ debt is partly the...