Chapter 9 – International Trade Questions and Answers: NCERT Solutions for Class 12 Geography: (Fundamentals of Human Geography)

1. Choose the right answer from the four alternatives given below:
(i)
Most of the world’s great ports are classified as:
(a) Naval Ports
(b) Oil Ports
(c) Comprehensive Ports
(d) Industrial Ports

Answer:
(c) Comprehensive Ports

(ii)
Which one of the following continents has the maximum flow of global trade?
(a) Asia
(b) North America
(c) Europe
(d) Africa

Answer:
(b) North America

(iii)
Which one of the following South American nation, is a part of OPEC?
(a) Brazil
(b) Chile
(c) Venezuela
(d) Peru

Answer:
(c) Venezuela

(iv)
In which of the following trade blocs, is India an associate member?
(a) SAFTA
(b) OECD
(c) ASEAN
(d) OPEC

Answer:
(a) SAFTA

2. Answer the following questions in about 30 words:
(i)
What is the basic function of the World Trade Organisation?

Answer:
Basic function of World Trade Organisation is to act as an international organisation to deal with the global rules of trade between nations. It sets the rules for the global trading and resolves the disputes between member nations. It is a permanent institution for looking after the promotion of free and fair trade amongst nations. WTO also covers trade in services, such as telecommunication and banking, and other issues such as intellectual rights.

(ii)
Why is it detrimental for a nation to have negative balance of payments?

Answer:
Negative balance of payment indicates that for a country the expenditure on imports is higher than the income from exports. This implies that a country is running down on its stock of foreign exchange and it has to bank upon international loans for funding the payments of imports.

(iii)
What benefits do nations get by forming trading blocs?

Answer:
Countries with geographical proximity, similarity and complementarities in trading item form trading blocs. These develop as a response to failure of global organisation to speed up intra-regional trade. The main benefits arising from trade blocs are:
Increase intra-regional trade by removing trade tariffs within member nations.
Have a greater say in international market as they have more power as trading bloc than as an individual nation.

3. Answer the following questions in not more than 150 words:
(i)
How are ports helpful for trade? Give a classification of ports on the basis of their location.

Answer:
The commercial part of a harbour containing facilities for embarking and disembarking passengers, loading and unloading, and facilities for storage are called ports.
Ports are called gateways of international trade. 90-95% of international trade is carried out through them. Major part of the international trade is carried out through waterways and ports are two ends of a waterway, they become extremely important.
Cargoes and travellers pass from one part of the world to another through these ports.
The ports provide facilities of docking, loading, unloading, storage facilities for cargo.
In order to provide these facilities, the port authorities make arrangements for maintaining navigable channels, arranging tugs and barges, and providing labour and managerial services.
On the basis of location ports can be classified as:
Inland Ports: These ports are located away from the seacoast. They are linked to the sea through a river or a canal. Such ports are accessible to flat bottom ships or barges. For example, Manchester is linked with a canal; Memphis is located on the river Mississippi; Rhine has several ports like Mannheim and Duisburg; and Kolkata is located on the river Hoogly, a branch of the river Ganga.
Out Ports: These are deep-water ports built away from the actual ports. These serve the parent ports by receiving those ships, which are unable to approach them due to their large size. Classic combination, for example, is Athens and its out port Piraeus in Greece.

(ii)
How do nations gain from International Trade?

Answer:
International trade is the result of specialisation in production. It benefits the world economy if different countries practise specialisation and division of labour in the production of commodities or provision of services. Each kind of specialisation can give rise to trade. Thus, international trade is based on the principle of comparative advantage, complimentarity and transferability of goods and services and in principle, should be mutually beneficial to the trading partners. Undertaking international trade is mutually beneficial to nations as it leads to regional specialisation.
Higher level of production: With availability of foreign technology and production equipments, even developing nations are able to increase their production level.
Better standard of living: With increased production and trade, there is an increase in exports and hence increased per capita income which gives rise to increased standards of living.
Worldwide availability of goods and services: Before liberalization of international trade, all goods were not available in all parts of world, which deprived both consumers as well as producers of developing countries. With international trade both consumers and producers benefit from availability of goods.

Very Short Answer Type Questions

Question 1.
Define trade.

Answer:
Trade means voluntary exchange of goods and services where for both the parties trade is mutually beneficial.

Question 2.
What are the two levels at which trade can be conducted?

Answer:
National and International are two levels at which trade can be conducted.

Question 3.
Why do countries trade with each other?

Answer:
Countries need to trade to obtain commodities that they cannot produce themselves, or they can get elsewhere at lower price.

Question 4.
What is meant by barter system?

Answer:
Barter system is practiced in primitive society where direct exchange of goods take place.

Question 5.
Which two countries were connected by the silk route?

Answer:
Italy and China were connected by the silk route.

Question 6.
Define Slave Trade.

Answer:
15th .century onwards, the Europeans used to capture African natives and forcefully transport them to the newly discovered Americas for their labour in the plantations as slaves. So, slave trade was a lucrative business.

Question 7.
What is considered as volume of trade?

Answer:
The total value of goods and services traded makes up the volume of trade.

Question 8.
What is balance of trade?

Answer:
Balance of Trade records the value of the goods and services imported as well as exported by the country to the other countries.

Question 9.
What is dumping?

Answer:
Dumping is the practise of selling a commodity in two countries at a price that differs for reasons not related to cost.

Question 10.
When was WTO formed? Where are its headquarters?

Answer:
In 1948, General Agreement for Tariffs and Trade was formed. In 1994, it was decided to set up a permanent institution to look after free and fair trade among nations, and thus GATT was transferred to World Trade Organisation from 1-January-1995. Its headquarters are located in Geneva, Switzerland.

Question 11 .
Where are the headquarters of following located:
(a) ASEAN
(b) EU
(c) LAIA
(d) OPEC
(e) CIS

Answer:
(a) Jakarta
(b) Brussels, Belgium
(c) Montevideo, Uruguay
(d) Vienna, Austria
(e) Minsk, Belarus

Question 12.
What is hinterland?

Answer:
Hinterland is the area served by the port – area of influence.

Question 13.
Kolkata port is located on which river?

Answer:
Kolkata port is located on the river Hoogly.

Question 14.
Name the packet stations across the English Channel?

Answer:
Dover in UK and Calais in France are packet stations across the English channel.

Question 15.
What was the initial form of trade in primitive societies?

Answer:
The initial form of trade in primitive societies was the barter system, where direct exchange of goods took place. For example, person producing wheat will exchange it for rice, clothes and other goods he needs from their respective producers.

Question 16.
How did the word salary come into use?

Answer:
The word ‘salary’ comes from the Latin word ‘Salarium’ which means payment by salt. As in those times producing salt from sea water was unknown and could only be made from rock salt which was rare and expensive. That is why it became a mode of payment.

Question 17.
Why was Silk Route important in ancient times?

Answer:
The Silk Route was connecting Rome to China. It was along the 6,000 km route. The traders transported Chinese silk, Roman wool and precious metals and many other high value commodities from intermediate points in India, Persia and Central Asia.

Question 18.
When and how did slave trade begin?

Answer:
Slave trade began in the fifteenth century. The Portuguese, Dutch, Spaniards, and British captured African natives and forcefully transported them to the newly discovered Americas for their labour in the plantations. Slave trade was a lucrative business for more than two hundred years. Later on, it was banned.

Question 19.
What are important aspects of international trade?

Answer:
International trade has three important aspects:
Volume of trade
Sectoral composition of trade
Direction of trade.

Question 20.
How do we evaluate the importance of a port?

Answer:
The importance of a port is judged by the size of cargo and the number of ships handled. The quantity of cargo handled by a port is an indicator of the level of development of its hinterland.

Question 21.
What is the main objective of WTO?

Answer:
The main objective of WTO is to promote international trade. It is the only international organisation dealing with the global rules of trade among nations. It sets the rules for the global trading system and resolves disputes between its member nations. WTO also covers trade in services, such as telecommunication and banking, and others issues such as intellectual rights.

Question 22.
Write a brief note on NAFTA.

Answer:
NAFTA stands for North American Free Trade Association. It was formed in 1994. Its member countries are USA, Canada and Mexico. It deals in agro products, minerals, chemicals, wood, paper, transport vehicles, optical instruments.

Question 23.
Write a brief note on OPEC.

Answer:
OPEC stands for Organisation of Petroleum Exporting Countries. It was formed in 1949. It deals in crude petroleum. Its aim is to coordinate and unify petroleum policies.

Question 24.
Write a brief note on EU.

Answer:
EU stands for European Union. It was formed in 1992. It has a single market with a single currency. Its headquarters is in Brussels, Belgium. Its member nations are Austria, Belgium, Denmark, France, Finland, Ireland, Italy, Netherlands, Luxemburg, Portugal, Spain and Sweden.