T3 development and trade

Trade &

Development

Trade means…

Exchanging goods or services

Often for money $$$

IMPORTS

EXPORTS

$$$ $$$

IMPORTS

EXPORTS

$ $$$

Trade surplus – more exports than imports

IMPORTS

EXPORTS

$$$ $

Trade surplus – more exports than importsTrade deficit– more imports than exports

Surplus Becomes richer

More developed

Deficit Gets into debt Stays poor

MEDC’sTrade

manufactured goods

Sold for more $$$

LEDC’s Trade primary products

Cheap, and price goes up

and down

• Complete exercises 1-5 on page 271.

Some LEDC’s export only one or two goods

They face financial difficulty when…

Supply increases from other LEDC’s

Demand decreases in the MEDC’s

Crops fail or a resource runs

out

Trading blocsEFTA

EFTATariffs ($)

Quota (<)

Trading blocs increase trade within the bloc

Countries outside the bloc lose out on income

Most trade is within or between the MEDC trading blocs (NAFTA, EFTA)

Polices free trade

agreements

Organises trade

negotiations

Settles trade disputes

Free trade is good because…

LEDC’s will earn more money from exports

Countries’ economies will grow and this will reduce poverty

Free trade is bad because…

LEDC’s will import food that will put their own farmers out of work

USA and EU produce so much food that they don’t need to import more of it

Fair trade ensures a ‘fair’

price for producers in

LEDC’s,

i.e. the price is better than what they would get on the world

market.

• Complete all exercises on pages 273, 275.