17 terms

International trade and access to markets

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Trade
Is the exchange of goods, money and services between countries and regions.
Exports
The goods made in a region and sold to other places (they Exit the country or region).
Imports
The goods bought into a place from other regions (they come Into the country or region).
Trade surplus
If the value of exports for a country or region is greater than its imports
Trade deficit
If a region imports more than it sells
Most HICs and NICs
import primary products which have low value and export high value manufactured goods and even higher value services.
Most LICs
Export lower value primary products (such as cocoa, cotton etc.). The price of primary goods varies widely and producers can lose out massively, so the trade in a sense is unfair.
Comparative advantage
When one country can produce a good or service at a lower cost than another. This means a country can produce a good relatively cheaper than other countries. Specialising like this with a lower opportunity cost should in theory lead to an increase in economic welfare.
Race to the bottom
Where companies attempt to undercut the competition's prices by sacrificing standards in areas such as quality, safety and wages.
Subsidies
A form of financial aid or support extended to an economic sector generally with the aim of promoting economic and social policy. E.g. Common Agricultural Policy of EU
Embargoes
An official ban on trade or other commercial activity with a particular country.
Sanctions
Laws passed to restrict or abolish trade with certain countries. E.g. They have been imposed upon Iran to try and prevent their development of nuclear weapons
Import Licence
An official document from a government that allows the import of certain goods or services into a country.
Import Quotas
A type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time. These are typically used to benefit the producers of a good in that economy.
Protectionism
Practice of shielding a country's domestic industries from foreign competition by taxing imports.
Tariffs
A common barrier to trade where a tax or duty has to be paid on a particular class of imports or exports.
Free trade
International trade left to its natural course without tariffs, quotas, or other restrictions.
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