Free-Trade Agreements and Globalisation
What free trade and free-trade agreements are, the arguments for and against them, and how globalisation connects the world, with its benefits, drawbacks and ethical questions.
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Free interactive practice at using the material, which is what the marks are for.
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A more connected world
Countries can agree to trade freely with each other, dropping the taxes and limits that get in the way. At the same time the world is becoming ever more connected, a change called globalisation. Both bring real benefits and real costs. This module looks at free-trade agreements, globalisation, and the arguments on each side.
Trade words to know
Learn these before you weigh the arguments.
For against against
Free trade and globalisation help some and hurt others.
Name the point, say who it affects
In the exam, take each argument and say who it helps or harms. Free trade gives shoppers cheaper goods and firms bigger markets, but it exposes local firms to tougher competition. Globalisation spreads technology and jobs, yet raises questions of fair pay and the environment. A regional free-trade bloc is one example of a free-trade agreement.
Match the term
- free trade
- a tariff
- a free-trade bloc
- globalisation
- trade with no barriers
- a tax on imported goods
- countries agreeing to trade freely
- the world growing more connected
Match the argument
- cheaper goods for shoppers
- bigger markets for firms
- some jobs moving abroad
- worries about fair pay
- a benefit of free trade
- a benefit for producers
- a drawback for workers
- an ethical concern of globalisation
What is free trade?
What does free trade between countries mean?
- Trading without barriers such as tariffs and limits.
- Goods being given away for nothing.
- Countries refusing to trade at all.
- A country making everything itself.
Benefits of globalisation
Select the TWO genuine benefits of globalisation.
- New technology spreads more quickly
- Consumers get a wider choice of goods
- Every local job is made completely safe
- It has no effect on the environment
Remove the tariff
With a tariff a good costs 25 units, of which 5 units is the tariff. Under free trade the tariff is removed. Subtract to find the price without the tariff. What is the answer?
Order the free-trade effect
Put the effect of removing a tariff in order, earliest first.
- A tariff on imports is removed
- Imported goods become cheaper
- Shoppers buy more of them
- Local firms must compete harder
Complete the summary
Trade with no barriers is called _____ trade, and a tax on imports is a _____. As the world grows more connected through trade, a process called _____, technology spreads but some _____ may move abroad.
Spot the drawbacks
Tap the TWO drawbacks of free trade and globalisation.
- some jobs move abroad
- local firms face tougher rivals
- shoppers get a wider choice
- goods become cheaper
Judge the case
Read each case and choose the best answer.
- Two countries drop all tariffs on each other so goods flow freely between them. What is this?
- A UK factory closes because a firm abroad can make the same goods more cheaply. What does this show?
- People worry that goods shipped around the world add to pollution. What kind of concern is this?
Explain free trade and globalisation
Explain what free trade and globalisation are, and give arguments for and against them.
- Say what free trade is and give one argument for it
- Give one argument against free trade
- Explain what globalisation is and one benefit and one drawback