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Cambridge IGCSE Business Studies Section 6 External influences on business activity
different countries being dependent upon each other. Brands become recognised
globally and products and services are easily accessible anywhere in the world.
Growth in
international
trade
Global Dependency on
recognition the global
of brands economy
Characteristics
of globalisation
Greater
Company movement of
operating products,
in more than services,
one country people and
money
E-commerce: see
Chapter 13, page 186. Figure 26.1 Characteristics of globalisation
Growth of globalisation
Factors that have increased the pace of globalisation are migration (movement of
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people from one place to another) and the improvement of technology (leading
to faster and more effective telecommunication and transportation).
The development of trade agreements between countries held together
by free trade agreements have also contributed to the growth of
globalisation.
APEC aims to promote free trade
Free trade agreements are considered to be an important way of opening up
in the Asia-Pacific region
foreign markets. Most free trade agreements aim to reduce trade barriers between
member countries by creating favourable trade and investment policies. Free trade
KEY TERM agreements also help business operations by improving economic and technical
cooperation. Countries wanting to trade with each other form a trade bloc and
Trade bloc: a group of countries
reach a common agreement to lower trade barriers within the member countries.
that trade with each other and
are usually part of a free trade For example, the Asia-Pacific Economic Cooperation (APEC) is an association of
agreement. 21 countries that aims to promote free trade and economic cooperation throughout
the Asia-Pacifi c region.
EXPLORE!
Is your country part of a trade agreement? If not, research a free trade agreement of
your choice. (Hint: Use the internet or ask your teacher to provide you with business
newspapers or journals to do your research.)
Has this helped reduce barriers to trade between member countries? Has this helped
the economies of the member countries?
