World Trade Dynamics and Development

Importance of World Trade

International trade is important because of the unequal distribution of natural resources, the differences between the economies of different states, and the interests of large companies in capturing part of the world market.

Key Global Trading Regions

• USA: The world's main importer and the second largest exporter. Its production is higher than any other country.
• EU: The world's largest trading bloc. Member states are small but wealthy, and they import and export a great many products.
• Australia: Does a lot of trade in the Pacific and with East Asian countries.
• Africa: Contributes little to international trade because of its level of poverty.
• Middle Eastern Countries (Saudi Arabia): Primarily export oil.
• Southeast Asia: Do the most international trade.
  • Japan: Exports cars, hi-tech electronics.
  • China: Has the second highest volume in trading goods.
  • India: Exports oil, textile goods, chemical products.
  • South Korea: One of the most technologically advanced countries.
• The Commonwealth of Independent States (CIS): Is an organization consisting of the former Soviet republics.

Globalization of Trade

Economic policies eliminating trade barriers have allowed multinational companies to relocate their production.

The money invested in a country can help to create jobs and wealth.

This capital can be quickly taken away, which can cause a serious crisis.

Levels of Economic Development

• North America, Japan, EU: The most developed regions (modern production, high-quality and expensive products).
• Africa, Asia, Latin America: Least developed regions (older production, low-quality and cheaper products).
• Countries with so-called Emerging Economies: Have some of the functions and activities of developed countries and are capable of starting their own initiatives.

Future Alternatives for Development

Trade keeps developing countries in poverty; these countries can only grow if they have capital to invest. They get capital by borrowing money from developed countries.

• Cancel the external debt of the poorest countries.
• Promote fair trade: Ensures that producers in developing countries are adequately paid.

Understanding External Debt

External debt is the money some countries owe to foreign creditors. These countries have to return the money they owe, with interest.

Perspectives on Debt Cancellation

• A) Support for Cancellation: Some countries cancel all or part of the debt to help the borrowing country.
• B) Opposition to Cancellation: In many developed countries, cancelling debt is opposed by some political and social sectors that don't want to lose any money owed to them.