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differential access to trade - Coggle Diagram
differential access to trade
HOW EASY IT IS FOR C OUNTRYS TO GET STARED IN INTERNATIONAL TRADE , SOME FIND IT MUCH EASYER THAN OTHER
developed counrys find it easyer to trade and therfore get richer and thrive. Developing/ LIC struggle to acess trade.
WHY IS IT EASIER FOR DEVELOPED COUNTRYS? 1)they can put higher tarrifs as they alreadsy have their own strong economy. This makes it harder for poor countrys to acess profitable markets .2) Developed countrys can afford to pay high tarrifs . 3)They have more monney to invest in developing countrys .4) less developed countys rely on loans from developed countys in which the developed profit.
HOW DO TRADE AGREEMENTS AFFECT ACESS TO TRADE?
trading agreements are set up for reduced tariffs less restrictions and sometimes free trade
if a country gets a trade deal or joins a trade block the country can begin to develop
if a country joins one trade block it can be difficult to do new trade deals with countrys outside this agreement
less developed countrys not in a trade bloc must pay high tarrifs when trading whith them which can limite them
it removes the possibility of protecting its domestic industrys which may not have grown enough to compete without protection
IMACTS OF DIFFERENTIAL TRADE ON PEOPLE
Trade barriers and restrictions can be used as political and economical wepons and bargoning chips when their is a dispute between countrys
for example in 2016 the UN security counsilimposed sanctions against Iran when they thretaned to use neucleur power. This harmed Irans economy and therfore the people , espesialy the poor, suffered.
IMPACTS OF LIMATED ACESS TO TRADE
dont make a smuch from selling and exporting so the goverment doesnt have much money to spend on development
if a county is not involved in trade other countrys will be reluctant to invest money in it, reducing the chance of development
can thretan food and energy security , espeshaly impact the poorest
imports become inacessable and expencive
if they carnt develop then unemployment and povery will increase
countys develop a trade deficit which can only be "fixed" by borowing monney which increases debt and reduces chances of development so the country stays poor
HOW DO WE REDUCE THE PROBLEM OF DIFFERENTIAL ACESS TO TRADE
strugaling countys were given specific differeential treatment (SDT) so they are able to acess the markets. It starts with primary products but once they are in trade it is easy to diversify.
e.g. EUs 2001 everything but ars agreement which allowed countys strugaling with trade to trade tarrif free with the EU
SPECIAL AND DIFFERENTIAL TREATMENT . THE ROLE OF WTO IN REDUCING DIFFERENTIAL ACESS TO TRADE
in the 1990s there was a growing number of newly inderpendant countys after the decolonisation of Africa, Asia and the Caribbean . It was recognised that these countrys would face huge tarifs, quotas and barriers due to past protectionalist polocys from the richer countys. The least developed countys catogory was created by the UN . It meant that these countys would be given support to overcome their traiding disadvantages
SPECIAL AND DIFFERENTIAL AGREEMENT AGREEMENTS
to give support messures to developing countrys to overcome trading difficultys
additional freedom to subsidise exports
allowed to restrict imports more than developed countrys
preferential acces to trade agreements, perticulaly to developed countys
PROBLEMS WITH SDTs
rich countys saw SDT as being unfair, China in particular was abusing its rights to SDT
become some countys saw it as unfair they created bi-lateral agreements rather than trade blocks
e.g Mexico pulled out of SDTs and instead opted for NAFTA