Globalisation Of Trade: International Trade: Free Trade, Trading Blocs, Trade Restrictions And Sources Of Support For Exporters (Copy)
Cheat Sheet: 3.1.4 Free Trade, Trading Blocs, Trade Restrictions and Export Support
Free Trade
| Concept | Meaning | Example |
|---|---|---|
| Free Trade | International trade without barriers such as tariffs, quotas, or restrictions | WTO promoting free trade globally |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Trading Blocs
| Feature | Explanation | Example |
|---|---|---|
| Meaning | Group of countries agreeing to reduce/remove trade barriers among themselves | EU, ASEAN, NAFTA (now USMCA) |
| Advantages | Larger markets, economies of scale, more investment | EU single market boosts trade |
| Disadvantages | Trade diversion (focus only on bloc), loss of independence, unequal benefits | Smaller economies overshadowed by larger members |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Trade Restrictions
| Type | Meaning | Effect | Example |
|---|---|---|---|
| Tariffs | Taxes on imports | Make imports more expensive | US tariff on Chinese steel |
| Quotas | Limit on quantity of imports | Protects local industry but raises prices | Quota on sugar imports |
| Embargoes | Complete ban on trade with a country | Cuts off market access | US embargo on Cuba |
Effects on Commercial Activities:
- Higher costs for importers → price rises for consumers
- Exporters may face reduced markets
- Local producers protected from competition
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Sources of Support for Exporters
| Source | Explanation | Example |
|---|---|---|
| International Trade Fairs | Showcase products to global buyers | Dubai Expo for international businesses |
| Cheaper Bank Loans | Finance for expansion & export activities | Bank loan with low interest for exporters |
| Insurance Guarantee | Protects exporters from risks like non-payment | Export credit guarantee schemes |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course
Summary
| Concept | Key Idea |
|---|---|
| Free trade removes barriers → encourages global business. | |
| Trading blocs create regional opportunities but may cause trade diversion. | |
| Trade restrictions protect local industries but raise costs. | |
| Exporter support (fairs, loans, insurance) reduces risks and promotes trade. |
Written and Compiled By Sir Hunain Zia, World Record Holder With 154 Total A Grades, 7 Distinctions and 11 World Records For Educate A Change O Level And IGCSE Commerce Full Scale Course