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Economics IGCSEPDF 111
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6.2 Globalisation, Free Trade & Protection
Free trade
Globalisation
Protectionism
Advantages of globalisation
Disadvantages of globalisation
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● Domestic industries may struggle to compete; job losses in some sectors.
● Environmental concerns, cultural homogenisation, inequality between and within
countries.
● Profits may be repatriated by MNCs rather than retained locally.
Trade between countries without tariffs, quotas, subsidies or other trade-barriers.
Promotes specialisation and efficiency; leads to higher overall welfare.
● Access to larger markets, greater competition, innovation, lower costs, transfer of
technology and skills.
● Consumers benefit from a greater variety of goods and lower prices.
Process by which economies become more interdependent through increased trade,
investment, migration, technology and culture.
Features: growth of multinational corporations (MNCs), global supply chains, reduction in
trade barriers, improved transport and communication.