3.1 Trade

swiss watchcorn production

Trade and the concept of comparative advantage: note that this is not explained properly on page 400 of your book. What they are defining there is absolute advantage, e.g. with resource endowment.  Comparative advantage might be another important factor in production like lower wage costs, as explained in class with the US corn and Swiss watches example.


A good website for everything to do with international trade and economics for this unit is: http://internationalecon.com/index.php  See, for example the section on trade terminology:  http://internationalecon.com/Trade/Tch5/T5-4.php

1. Division of labour
New International Division of Labour “Spread of different stages of manufacturing to locations in different countries, to exploit differences in factor costs and economies of scale; more generally, since late 1970s, process in which especially Asian countries assume key roles in certain industries (cf. commodity chains).” See http://www.geographyinthenews.rgs.org/glossary

Definition of new international division of labour http://www.soci.canterbury.ac.nz/resources/glossary/newinter.shtml

Wikipedia on division of labour http://en.wikipedia.org/wiki/Division_of_labour

Economist article The fall in manufacturing employment in developed economies is a sign of economic progress, not decline (Sep 2005). http://www.economist.com/displaystory.cfm?story_id=4458528

“The Disintegration of the International Division of Labour” from the Ludwig von Mises Institute, Alabama. http://www.mises.org/mmmp/mmmp9.asp

International Division of Labour and Global Economic Processes Another academic offering which uses the car trade as a case study. http://www.mpi-fg-koeln.mpg.de/~lk/netvis/globale/

Fairtrade Foundation The organisation that oversees the Fairtrade mark increasingly seen on goods in our supermarkets (£140m worth in 2004). Sections on the history of fair trade, the benefits of the mark and the standards guaranteed by it. http://www.fairtrade.org.uk

Case Study of Fair Trade Coffee: Parts 1 & 2


Traidcraft UK organisation dedicated to fighting poverty through trade. http://www.traidcraft.org.uk/

Oxfam Make Trade Fair minisite. http://www.maketradefair.com/en/index.htm Mugged: report on coffee

Clipper Tea Clipper tea has earned the Fairtrade mark and its production ensures strict standards are met covering education, healthcare, fair pay, housing and working conditions. The tea gardens in South India and Sri Lanka are surrounded by virgin forest. The pickers and their families play a role in protecting the environment from illegal logging and poaching. http://www.clipper-teas.com

Choccie bikkie A site from Channel 4’s On The Line team, now hosted by Oxfam, about the implications of that treat in your lunch box. Quiz and Ghana visit. http://www.oxfam.org.uk/coolplanet/ontheline/schools/chocbix/index.htm

Zambia Bized (as in business education) has a number of worksheets connected to virtual field trips on a variety of topics including GDP and living standards, commodity prices, trade policy and exchange rates. http://www.bized.ac.uk/virtual/dc/teacher/works.htm

Global trade flows and patterns

World Trade Organisation

To see the historical background to the WTO see the video “From GATT to WTO” on the WTO students page

Introductory WTO video The Routes of Trade:


Spain and the WTO: see what Spain’s trading history is.

“The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.” http://www.wto.org/ Doha development agenda Negotiations on agriculture and services soured by discord. The Doha dog ministerial declaration was adopted in 2001. Negotiations have been extended with a new target end date of December 2006. http://www.wto.org/english/tratop_e/dda_e/dda_e.htm

OECD (Organisation for Economic Co-operation and Development)
The OECD groups 30 member countries sharing a commitment to democratic government and the market economy. http://www.oecd.org “OECD work on trade provides analytical underpinnings to support continued trade liberalisation and foster an understanding of trade policy linkages of public concern.” http://www.oecd.org/topic/0,2686,en_2649_37431_1_1_1_1_37431,00.html

Department for Trade and Industry
World Trade UK policy http://www.dti.gov.uk/ewt/uktrade.htm

Developments Magazine
Published by UK government department which deals with international development (DfID) – search the archive for back issues. Issue 15 (2001) is on trade, issue 25 (2004) on fair trade. http://www.developments.org.uk/data/archive1.htm http://www.developments.org.uk DfID http://www.dfid.gov.uk/

A to Z of trade From the DfID

6. Trade – justice and ethics

World Development Movement Campaigning for justice for the world’s poor, mainly focusing on aid, trade and debt issues. “We lobby decision makers to change the policies that keep people poor. We research and promote positive alternatives. We work alongside people in the developing world who are standing up to injustice.” http://www.wdm.org.uk Trade campaign http://www.wdm.org.uk/campaigns/trade/index.htm Trade glossary http://www.wdm.org.uk/campaigns/trade/trade4.htm

Trade Justice Movement A UK-based group of organisations including trade unions, aid agencies, environment and human rights campaigns, fairtrade organisations, faith and consumer groups. “We believe that everyone has the right to feed their families, make a decent living and protect their environment. But the rich and powerful are pursuing trade policies that put profits before the needs of people and the planet. To end poverty and protect the environment we need Trade Justice not free trade.” http://www.tjm.org.uk/

Ethical Trading Initiative The ETI is a UK alliance of companies, non-governmental organisations and trade union organisations. Aims to ensure decent working conditions for the people who produce the goods companies sell. Members include major clothing retailers, supermarkets and companies selling coffee, tea and flowers. http://www.ethicaltrade.org/

Tourism concern Campaigns for fair and ethically traded tourism. “We work with communities in destination countries to reduce social and environmental problems connected to tourism and with the out-going tourism industry in the UK to find ways of improving tourism so that local benefits are increased.” http://www.tourismconcern.org.uk

Cafod trade policy papers Papers by leading a Christian charity. http://www.cafod.org.uk/policy_and_analysis/policy_papers/trade


Financial organisations

The World Bank is a source of financial and technical assistance to developing countries made up of two development institutions owned by 184 member countries – the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). The IBRD focuses on middle income and creditworthy poor countries, while IDA focuses on the poorest countries in the world. Together they provide low-interest loans, credit and grants to developing countries. http://www.worldbank.int

IMF (International Monetary Fund) “The IMF is an organization of 184 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.” http://www.imf.org/

G8 Gleneagles July 2005 Official UK website http://www.g8.co.uk/ G8 stands for the ‘Group of Eight’ nations. The G8 are the United Kingdom, France, the Russian Federation, Germany, the United States, Japan, Italy and Canada. The European Commission is also represented. It began in 1975, at the invitation of France, as the G6. It does not have a fixed structure or permanent administration and the presidency rotates annually. The UK hosted G8 in 2005 and handed the presidency over to Russia.


Additional trade links:


BBC: good summary of trade inequalities problems: http://news.bbc.co.uk/2/shared/spl/hi/pop_ups/03/business_trade_and_poor_countries/html/1.stm




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