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2.2.1 Contemporary Patterns of
International Trade
Topic Human - Trade
1.1 International Trade Involves Flows of
Merchandise, Services and Capital which
Vary Spatially
An understanding of the terms merchandise, services and capital as
components of international trade.
Current spatial patterns in the direction and components of international
trade, including examples of both inter-regional and intra-regional.
Key Definitions
Merchandise trade: Physical goods (manufactured products, fuels,
agricultural commodities).
Services trade: Intangible outputs (finance, tourism, education, ICT,
transport).
Capital flows: Movement of money for investment (FDI, portfolio
investment, remittances).
Spatial Patterns
Advanced Countries (ACs):
Higher % of exports as services (finance, ICT, education).
Still dominate merchandise exports in value terms.
Employment structured skewed towards services.
Emerging & Developing Countries (EDCs):
2.2.1 Contemporary Patterns of International Trade 1
, Increasing share of global trade, especially in manufactured goods.
China: rapid rise in merchandise exports, now also expanding services.
Low-Income Developing Countries (LIDCs):
Often dependent on primary commodities (coffee, cotton, minerals).
Vulnerable to price fluctuations and unequal exchange.
Examples of Trade Flows
Inter-regional:
Europe exports agricultural goods (twice Asia’s value).
Middle East dominates fuels and mining exports.
North-North trade (ACs trading with each other) historically dominant
but declining.
Intra-regional:
South-South trade (EDCs trading with each other) has more than
doubled in the last decade.
ASEAN, Mercosur and African regional blocs growing in importance.
FDI flows:
Top recipients (2016-2017): Netherlands, USA, UK, Hong Kong, China.
Example: Qatar invested £2bn in London’s shard.
Evaluation
ACs remain dominant in services and high-value merchandise.
EDCs increasingly drive global trade growth (China, India, Brazil).
LIDCs often locked into low-value primary exports → risk of exploitation via
unequal exchange.
1.2 Current Patterns of International Trade
are Related to Global Patterns of Socio-
economic Development
2.2.1 Contemporary Patterns of International Trade 2
, The relationship between patterns of international trade and socioeconomic
development using national indices, such as ‘value of exports’ and ‘Human
Development Index’.
How international trade can promote stability, growth and development
within and between countries, through flows of people, money, ideas and
technology.
How international trade causes inequalities, conflicts and injustices for
people and places, through flows of people, money, ideas and technology
Trade and Development Relationship
Indices:
Value of exports: Higher in ACs, but growing rapidly in EDCs.
HDI: Strong correlation between high FDI and high trade volumes.
Case evidence:
Poland, Hungary, Slovakia: GDP growth (1991-2005) linked to rising
exports (% of GDP).
China: forecast to drive one-third of global growth over next decade.
How Trade Promotes Growth & Stability
Flows of people:
Labour mobility → New International Division of Labour (NIDL).
Flows of money:
FDI inflows support infrastructure, jobs and industrialisation (e.g.
Ethiopia SEZs, Volkswagen in Rwanda).
Flows of ideas & technology:
Knowledge transfer through MNCs and global supply chains.
ICT and transport innovations reduce costs (sea freight now 20% of
1930 levels).
Positive impacts:
Rising middle classes in EDCs → new consumer markets.
Trade agreements (EU, ASEAN, WTO liberalisation) → reduced barriers.
2.2.1 Contemporary Patterns of International Trade 3
, How Trade Causes Inequalities, Conflicts & Injustices
Unequal exchange:
LIDCs export raw materials, re-import processed goods at higher cost.
Growers in cocoa industry earn only 6% of chocolate bar value (down
from 16% in 1980).
Commodity dependence:
50 developing countries rely on 3 or fewer commodities for >50% of
export earnings.
African economies vulnerable to price shocks (commodity-price pain).
Conflicts & injustices:
US-China trade war (2018 tariffs) disrupted global supply chains.
Oligopsony in cocoa trade: Cargill, ADM, Callebaut control 60% of
global cocoa bean purchases.
Social inequality:
Free trade policies (Friedman’s model) reduce extreme poverty but
widen income gaps.
Industrialisation without education/infrastructure risks uneven
development.
Evaluation
Trade is a driver of development but uneven:
ACs benefit most from services and capital flows.
EDCs are reshaping global trade (China’s Belt & Road, Africa’s SEZs).
LIDCs remain vulnerable to exploitation, commodity dependence and
unequal exchange.
Globalisation increases interdependence but also exposes economies to
external shocks (financial crises, trade wars, climate change impacts).
2.2.1 Contemporary Patterns of International Trade 4
2.2.1 Contemporary Patterns of
International Trade
Topic Human - Trade
1.1 International Trade Involves Flows of
Merchandise, Services and Capital which
Vary Spatially
An understanding of the terms merchandise, services and capital as
components of international trade.
Current spatial patterns in the direction and components of international
trade, including examples of both inter-regional and intra-regional.
Key Definitions
Merchandise trade: Physical goods (manufactured products, fuels,
agricultural commodities).
Services trade: Intangible outputs (finance, tourism, education, ICT,
transport).
Capital flows: Movement of money for investment (FDI, portfolio
investment, remittances).
Spatial Patterns
Advanced Countries (ACs):
Higher % of exports as services (finance, ICT, education).
Still dominate merchandise exports in value terms.
Employment structured skewed towards services.
Emerging & Developing Countries (EDCs):
2.2.1 Contemporary Patterns of International Trade 1
, Increasing share of global trade, especially in manufactured goods.
China: rapid rise in merchandise exports, now also expanding services.
Low-Income Developing Countries (LIDCs):
Often dependent on primary commodities (coffee, cotton, minerals).
Vulnerable to price fluctuations and unequal exchange.
Examples of Trade Flows
Inter-regional:
Europe exports agricultural goods (twice Asia’s value).
Middle East dominates fuels and mining exports.
North-North trade (ACs trading with each other) historically dominant
but declining.
Intra-regional:
South-South trade (EDCs trading with each other) has more than
doubled in the last decade.
ASEAN, Mercosur and African regional blocs growing in importance.
FDI flows:
Top recipients (2016-2017): Netherlands, USA, UK, Hong Kong, China.
Example: Qatar invested £2bn in London’s shard.
Evaluation
ACs remain dominant in services and high-value merchandise.
EDCs increasingly drive global trade growth (China, India, Brazil).
LIDCs often locked into low-value primary exports → risk of exploitation via
unequal exchange.
1.2 Current Patterns of International Trade
are Related to Global Patterns of Socio-
economic Development
2.2.1 Contemporary Patterns of International Trade 2
, The relationship between patterns of international trade and socioeconomic
development using national indices, such as ‘value of exports’ and ‘Human
Development Index’.
How international trade can promote stability, growth and development
within and between countries, through flows of people, money, ideas and
technology.
How international trade causes inequalities, conflicts and injustices for
people and places, through flows of people, money, ideas and technology
Trade and Development Relationship
Indices:
Value of exports: Higher in ACs, but growing rapidly in EDCs.
HDI: Strong correlation between high FDI and high trade volumes.
Case evidence:
Poland, Hungary, Slovakia: GDP growth (1991-2005) linked to rising
exports (% of GDP).
China: forecast to drive one-third of global growth over next decade.
How Trade Promotes Growth & Stability
Flows of people:
Labour mobility → New International Division of Labour (NIDL).
Flows of money:
FDI inflows support infrastructure, jobs and industrialisation (e.g.
Ethiopia SEZs, Volkswagen in Rwanda).
Flows of ideas & technology:
Knowledge transfer through MNCs and global supply chains.
ICT and transport innovations reduce costs (sea freight now 20% of
1930 levels).
Positive impacts:
Rising middle classes in EDCs → new consumer markets.
Trade agreements (EU, ASEAN, WTO liberalisation) → reduced barriers.
2.2.1 Contemporary Patterns of International Trade 3
, How Trade Causes Inequalities, Conflicts & Injustices
Unequal exchange:
LIDCs export raw materials, re-import processed goods at higher cost.
Growers in cocoa industry earn only 6% of chocolate bar value (down
from 16% in 1980).
Commodity dependence:
50 developing countries rely on 3 or fewer commodities for >50% of
export earnings.
African economies vulnerable to price shocks (commodity-price pain).
Conflicts & injustices:
US-China trade war (2018 tariffs) disrupted global supply chains.
Oligopsony in cocoa trade: Cargill, ADM, Callebaut control 60% of
global cocoa bean purchases.
Social inequality:
Free trade policies (Friedman’s model) reduce extreme poverty but
widen income gaps.
Industrialisation without education/infrastructure risks uneven
development.
Evaluation
Trade is a driver of development but uneven:
ACs benefit most from services and capital flows.
EDCs are reshaping global trade (China’s Belt & Road, Africa’s SEZs).
LIDCs remain vulnerable to exploitation, commodity dependence and
unequal exchange.
Globalisation increases interdependence but also exposes economies to
external shocks (financial crises, trade wars, climate change impacts).
2.2.1 Contemporary Patterns of International Trade 4
