Zusammenfassung der Ressource
The nature and control of trade
- The nature of global trade is that free trade has come to dominate trading relations
- The WTO has led a series of trade agreements since the 1950s which have removed
- Taxes and tariffs on imports
- Quotas on imports
- Subsidies for domestic producers
- The result has been a huge growth in trade and wealth
- Some parts of the world have benefited from trade growth, such as Asia, and in particular China and India
- On the other hand, Africa's share of world trade has declined since 1970
- Explanations for trends
- International trade is very much in the hands of the TNCs. These have chosen to invest heavily in India and China but not in Africa
- In Asia, free trade zones
have been used to attract
investment by offering
companies tax breaks,
non-union areas and
limited regulation
- Africa will remain unattractive to much investment until it has more developed infrastructure, higher skills levels and greater political stability
- Free Trade?
- Trade has certainly become freer, but for some countries this is an illusion
- Much trade takes place between countries which are
members of trade blocs such as the EU, NAFTA and ASEAN
- Trade within a bloc tends to be tariff-free
- Trade between blocs may also have low tariffs if agreements have been reached
- For developing countries
outside any trade bloc, there
can still be considerable trade
barriers which prevent access
to markets
- Many African countries are still trapped in a colonial trade pattern of exporting
raw materials such as coffee, copper and timber to the developed world
- The prices of commodities are set on
the global stock exchanges and are
prone to extreme volatility
- Commodity prices rose steadily between November 2007 and July 2008 - good news for African exporters - only to collapse by November 2008, leaving exporters
20% worse off than they had been 12 months earlier
- Control
- The superpower
economies also
control innovation and
technology
- New inventions such
as drugs, microchips
and engines are
patented, and users
must pay a royalty or
licence fee to use the
technology
- 7%5 of these fees go
to just three powers,
with the USA
dominating
- This is another way in
which the superpowers
and developed
economies control both
trade and the availability
of technology and
innovation