Basis of International Trade
The factors on which international trade depends are as follows:
1. Difference in national resources:
- Geological structure: The distribution of the world’s national resources varies due to differences in geological structure. This determines the mineral resource base, with topographical variations ensuring diversity in crops and animals raised. Lowlands often have greater agricultural potential, while mountains attract tourists and promote tourism.
- Mineral resources: Minerals are distributed unevenly worldwide. The availability of mineral resources forms the basis for industrial development.
- Climate: Climate influences the types of flora and fauna that can survive in a region, leading to diversity in products. For instance, wool production thrives in cold regions, while tropical regions are suitable for growing bananas, rubber, and cocoa.
2. Population factors:
- Cultural factors: Distinctive forms of art and craft develop in certain cultures, valued worldwide. Examples include China’s finest porcelains and brocades, Iranian carpets, North African leatherwork, and Indonesian batik cloth.
- Size of population: Densely populated countries engage in significant internal trade but may have limited external trade. The standard of living affects demand for imported goods, with higher standards increasing the market for costly imported products.
3. Stage of economic development:
- At different stages of economic development:
- Agriculturally important countries trade agro products for manufactured goods.
- Industrialized nations export machinery and finished products, importing food grains and raw materials.
4. Extent of foreign investment:
Foreign investment can boost trade in developing countries lacking capital for industries like mining and oil drilling. Industrial nations invest in such industries, ensuring imports of foodstuffs and minerals and creating markets for their finished products, thereby increasing trade volume.
5. Transport:
Historically, trade was restricted to local areas due to inadequate transport. Only high-value items like gems, silk, and spices were traded over long distances. However, expansions in rail, ocean, and air transport, along with improved refrigeration and preservation, have led to spatial expansion of trade.
Chapter 8 International Trade| Class 12 Geography Notes
Class 12 Geography Notes: International Trade is an important topic in CBSE Class 12 Geography. These notes are created by subject experts to help students understand the topic easily. These notes cover important concepts like the significance of international trade, different types of trade, and concerns related to it.
With these notes, students can prepare well for their exams and improve their understanding of the subject.