Geopolitics of Trade
- Geopolitical relations between countries is more important than ever due to globalisation
- The movement of trade, people and money involves large-scale interaction between many countries
- All countries want greater benefits than costs of these movements
- Some countries have greater power and influence than others, leading to unequal dominance on the geopolitical global stage:
- Power comes from:
- Level of economic development
- Military force
- Dominance of modern technology
- Educated population
- Wealth of resources
- Strategic global location and large physical presence
- Power comes from:
- Political agreements between countries are a way of controlling these movements to various levels
Trade Relationships
- Terms of trade is the most important factor
- Regional trading has increased over the last forty years with the help of the World Trade Organisation (WTO)
- This has also seen the rise in superpowers and global TNCs wielding their dominance over developing countries and placing them with an unfair advantage
- Trade blocs are when barriers to trade between member countries are reduced or removed, whilst outside trade is still subject to normal trade tariffs
- Examples include the European Union (EU), NAFTA and ASEAN etc.
- Protection of these trade relationships can lead to tensions and military intervention or support:
- Tensions in the Middle East over oil production led, in part, to the Gulf War of 1991 with coalition forces deployed to protect the oil fields of Kuwait and ensure continued oil production for OPEC and the rest of the world
- Terms of trade have come under criticism from many developing countries
- They argue that agreements favour developed countries resulting in uneven trading
- This leaves them in a position of vulnerability with not enough benefit being passed on to improve their trading arrangements