Summary Chapter 2: globalization and international trade

Chapter 2: Globalization and
international trade
(pg 20-33 in textbook)



1. Growth in international trade




In recent decades, there has been considerable growth in world trade

 Facilitated by:
- reduction in trade barriers between countries and regions
- [regional] trade agreements (EU, NAFTA,..)
- emergence of institutions such as WTO, IMF, World bank, OECD
- product tourism (taking advantage of lower taxes, material sold at “transfer price”)
- technology advancements, e.g. containerization (see later)
 Hence more freight in moving all around the world
Logistics systems => an increasingly important role in the global economy

, The demand for international transport is derived from increase in international trade




Last few hundred years: greater openness and liberalized trade

However:

 protectionism has always immersed

Advanced nations are realizing that economic growth and stability depend on a strategic mix of trade
policies, meaning both free trade & protectionism.



Graphs… What are they telling us?

Some tips:

Look at the title!
• Trade: import + export
• Merchandise (goods) vs
services
• What is the legend telling us?
• Annual percentage change
• In relation to a starting point
• ...
• Volume vs value