Syllabus to take us up to Xmas

• Patterns of trade

• Identify patterns of trade between developed and developing countries.

• Students should be aware of changes in trade flows between countries and the reasons for them,

• for example the potential impact of China and India on world trade patterns and the possible reaction of developed economies.

Volume of world trade merchandise exports & GDP 1950 -

2008

-2

0

2

4

6

8

10

1950-60 1960-70 1970-80 1980-90 1990-00 2000-08 2001 2002 2003 2004 2005 2006 2007 2008

Volume of total ex ports GDP

Annual % change

Use your whiteboard - compare the changes of exports and GDP

over from 1950 – 2008 (4 marks)

Volume of world trade merchandise exports & GDP 1950

-2008

-2

0

2

4

6

8

10

1950-60 1960-70 1970-80 1980-90 1990-00 2000-08 2001 2002 2003 2004 2005 2006 2007 2008

Volume of total ex ports GDP

Annual % change

Use your whiteboard - compare the changes of exports and GDP

over from 1950 – 2008 (4 marks)

Difference between exports & GDP

What type of relationship is

there?

Is this a volatile or stable market?

World

-30-25-20-15-10-505

1015202530

2000 2001 2002 2003 2004 2005 2006 2007 2008IIIIIII

Volume of world trade (annual % change)Exports Imports

Use your whiteboard - compare the changes for imports and

exports from 2000 - 08 (4 marks)

Composition of geographical regions

Trade Groupings

• This is where countries in various parts of the world come together to form trade groups with varying degrees of formality.

• Their aim is to encourage trade among a group of nations.

Trade groupings• ASEAN

• MERCOSUR

• NAFTA

• EU

• CIS

• WTO

ASEAN Trade Group

NAFTA

• Commonwealth of Independent

states

World Trade Organisation

.

Everyone in green = member of WTO

Customs Union V Free Trade?

• Free trade

• Where a group of countries agree to trade without barriers between themselves, but maintain their own individual barriers with countries outside the area.

• Eg NAFTA

• Customs Unions

• This goes further than free trade, which eliminates not only barriers to trade between the member countries BUT also to have a common tariff barrier against the rest of the world.

• Eg The Single Market

Typical Evaluation Q’s

• To what extent do trade groupings generate increased trade and improve efficiency?

• Requires you to know about…. trade diversion versus trade creation within the context of trade groups!

Trade Diversion

• When countries within a trade group import from within the partner group countries rather than import from ‘cheaper’ non partner countries.

• This may encourage some of the countries’ industries to remain inefficient rather than compete on a global scale!

Trade Creation

• This is where the members of the trading group start to specialise in industries that they have a competitive advantage and benefit from economies of scale and improve efficiencies.

• More on this in a later lesson.

Your task – Internet research

• Using your handout (last 6 slides) of the different world trade groups

• You will be given one trade group to investigate & then share your findings with everyone else….

• What size is the trade group?• How many countries are in it?• When did it start?• What reasons were given for the start• Include any other ec data that you can find too.

Suggestions for research links…

• http://ec.europa.eu/trade/creating-opportunities/bilateral-relations/regions/

• http://news.bbc.co.uk/1/hi/world/americas/5195834.stm

• http://news.bbc.co.uk/1/hi/world/asia-pacific/country_profiles/4114415.stm

• http://news.bbc.co.uk/1/hi/world/europe/country_profiles/2429503.stm

Next lesson

What is world trade & UK data

WORLD TRADE

• Why is there world trade?

• Natural resources• Price• Product differentiation• political