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Trade in the Contemporary World

Trade inequalities, conflict and injustice

  • 3 things to know
  • Component 02

Overview

Recall questions on the core–periphery model and dependency theory, tariff escalation, commodity price volatility, the race to the bottom and the Rana Plaza collapse, conflict minerals and cobalt in the Democratic Republic of the Congo, land grabbing, export crops and food insecurity, carbon leakage, trade rules, Fairtrade, and resource booms.

What you need to know

Answer each one before you reveal it.

Your recallNot started
Key term

What are conflict minerals?

Key term

Which theory argues that poorer countries stay poor because trade drains their wealth towards richer ones?

Key term

What is tariff escalation, and why does it damage developing countries?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is meant by the core–periphery model of world trade?

    Model answer

    It describes a world split between powerful core economies that make high-value goods and set the rules, and peripheral economies that supply cheap raw materials and labour.

  2. 2

    Which theory argues that poorer countries stay poor because trade drains their wealth towards richer ones?

    Model answer

    Dependency theory argues that the trading relationship itself keeps peripheral countries underdeveloped by transferring their surplus to the core.

  3. 3

    What is tariff escalation, and why does it damage developing countries?

    Model answer

    Tariff escalation is charging higher import duties on processed goods than on raw materials, which discourages poorer countries from processing their own commodities and locks them into low-value exports.

  4. 4

    Explain why commodity price volatility is so damaging for an exporting country.

    Model answer

    A sudden price fall cuts export earnings and government revenue without warning, forcing budget cuts and causing currency weakness and debt problems that the country cannot control.

  5. 5

    What is meant by a race to the bottom in global trade?

    Model answer

    It is competition between countries to attract investment by cutting wages, taxes and environmental or labour standards, so conditions worsen for workers in every competing country.

  6. 6

    What did the collapse of the Rana Plaza building in Bangladesh in 2013 reveal about global supply chains?

    Model answer

    It killed 1,134 garment workers and showed that international brands were sourcing from unsafe, poorly regulated factories while accepting no legal responsibility for conditions inside them.

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AThe lower quartile is the 2nd value, 11 cm.
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