Integration of world economic Integration of world economic activityactivity

International tradeInternational trade Transnational corporations (TNC’s)Transnational corporations (TNC’s) International trading agreementsInternational trading agreements Trading blocs e.g. ASEAN, EUTrading blocs e.g. ASEAN, EU Global movements of capitalGlobal movements of capital

International trade can be defined as the International trade can be defined as the exchange of goods and commodities (visible exchange of goods and commodities (visible trade) and services (invisible goods) trade) and services (invisible goods) between countriesbetween countries

The current world pattern of trade is complexThe current world pattern of trade is complex

World trade is dominated by the OECD World trade is dominated by the OECD countries (Organisation for Economic Co-countries (Organisation for Economic Co-Operation and Development - 30 members) Operation and Development - 30 members) - set up in 1961 to coordinate international - set up in 1961 to coordinate international aid for ELDCs as well as a forum for aid for ELDCs as well as a forum for discussion on economic growth and tradediscussion on economic growth and trade

(www.oecd.org)(www.oecd.org) Majority of OECD trade is between member Majority of OECD trade is between member

countries, largely in manufactured goods.countries, largely in manufactured goods.

Other ‘players’ in global trading:Other ‘players’ in global trading:

Countries with Centrally-Planned Countries with Centrally-Planned EconomiesEconomies

OPEC (oil producing countries)OPEC (oil producing countries)

ELDCs especially the NICs ELDCs especially the NICs

(Newly Industrialised Country (Newly Industrialised Country

Taiwan, South Korea, Hong Kong andTaiwan, South Korea, Hong Kong and

Singapore - Four Tigers)Singapore - Four Tigers)

World Trade Organisation (WTO)World Trade Organisation (WTO) The World The World Trade Organization (WTO) is the only global Trade Organization (WTO) is the only global international organization dealing with the international organization dealing with the rules of trade between nations. rules of trade between nations.

Essentially, the WTO is a place where Essentially, the WTO is a place where member governments go, to try to sort out member governments go, to try to sort out the trade problems they face with each the trade problems they face with each other. other.

Traditional pattern of trade between Traditional pattern of trade between EMDCs and ELDCs is the exchange of EMDCs and ELDCs is the exchange of manufactured goods produced in EMDCs manufactured goods produced in EMDCs for foodstuffs and raw materials - this for foodstuffs and raw materials - this pattern of exchange is influenced by the role pattern of exchange is influenced by the role of transnational companiesof transnational companies

Limited evidence of trade between ELDCs - Limited evidence of trade between ELDCs - but will develop in future as trading blocs but will develop in future as trading blocs form e.g. LAFTA (Latin American Free form e.g. LAFTA (Latin American Free Trade Association) and ASEAN - Trade Association) and ASEAN - (Association of South East Asian Nations)(Association of South East Asian Nations)

This helps free trade between these This helps free trade between these countries.countries.

World Bank (International Bank for World Bank (International Bank for reconstruction and Development (IBRD)reconstruction and Development (IBRD)

An international finance institution owned by An international finance institution owned by it’s member countries responsible for it’s member countries responsible for channelling interest bearing loans and channelling interest bearing loans and technical assistance to poor countries. The technical assistance to poor countries. The world bank borrows in-turn from world world bank borrows in-turn from world marketsmarkets

International Monetary Fund (IMF)International Monetary Fund (IMF)The IMF is an organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.

The IMF can lend money to countries with balance of payment problems.