Economic Integration

Relaxing of government controls Free trade: The unobstructed trade between two countries with no restrictions on imports and exports.

Types of protectionism Tariffs: Tax on imports. Its purpose is to raise the price of the goods concerned. In Australia consumers pay tariffs on some imported goods such as clothing and footwear. The reason for the tariff is to protect the local Australian clothing and footwear industry from cheaper competition.

Quotas: A limit on the amount of a good or service that can be imported or exported. Eg quotas on bales of wool that can be exported

Subsidies: A grant given to producers of a good to protect the local industry. Eg Australia’s local car manufacturing industry.

Embargo: Embargo: A ban on the import or export of a specific product or service. A USA ban on Cuban cigars.

Game: Simsweatshop This game helps you empathise with the inequalities of economic integration

Economic integration. UTT Q1-8 p 271 Answers 1. Economic integration is the growing number of links between firms and economies and international borders.

2. The relative importance of international trade is massive because global citizens are dependent on it for goods and services (trade) and employment.

3. TNCs play a central role in the global economy by linking developing nations with developed nations, to produce and sell products globally.

4. Foreign investment is where individuals or businesses invest money or buy assets in overseas countries.

5. Highly skilled migration is of workers who have qualifications and are often employed by TNCS whereas poorly paid and low skilled workers have no qualifications.

6. Some groups are opposed to economic integration because of the inequalities created by economic globalisation and free trade.

7. Intergovernmental organisations (IGOs) try to promote free trade between countries and they give loans when nations economies are in crisis.

8. Protest groups argue that IGOs have undermined local decision making in developing nations by allowing outside companies (TNCs) and agencies to exercise too much control.