The Impact of Trade Assignment

Part A

Germany (Developed Nation)

a. GDP per Capita for the past 5 years:

2015 45408.31 USD

2014 44877.5 USD

2013 43554.21 USD

2012 44261.9 USD

2011 44306.5 USD

b. GDP growth rate for the past 5 years:

2014-2015 1.18%

2013-2014 3.04%

2012-2013 88.34%

2011-2012 -0.1%

c. Percentage GDP from trade: 46.8% (in 2015)

d. Ratio of exports to imports: $1.41T : $1.13T (in 2014)

e. Composition of exports and imports:

- Exports: cars, vehicle parts, packaged medicaments, planes, helicopters, spacecrafts,
and human/animal blood
- Imports: crude petroleum, cars, computers, and packaged medicaments

f. Amount of Foreign Direct Investment (FDI): December 2016 = -7642.92 EUR million
November 2016 = 6612.71 EUR million

g. Gini-Coefficient of for the past 5 years:

2011 30.13

2010 31.14

2009 31.51

2008 31.29

2007 32.4
Based on the gross domestic product (GDP) where nearly half of the countrys product is
dependent on trade, the impact of trade for Germany is significant. It fuels stability within the
economy by allowing a steadily increasing GDP and GDP per Capita, as well as a decreasing
GIni coefficient, improving economic equity in the distribution of income.

Morocco (Developing Nation)

a. GDP per Capita for the past 5 years:

2015 3239.55 USD

2014 3141.85 USD

2013 3106.95 USD

2012 3014.73 USD

2011 2967.77 USD

b. GDP growth rate for the past 5 years:

2014-2015 3.11%

2013-2014 1.12%

2012-2013 3.06%

2011-2012 1.58%

c. Percentage GDP from trade: 76.379% (in 2015)

d. Ratio of exports to imports: $44.9B : $27.8B (in 2014)

e. Composition of exports and imports:

- Exports: textiles, electronic components, crude minerals, inorganic materials, petroleum
products, fertilizers (phosphates), citrus fruits, vegetables, and fish
- Imports: crude petroleum, textile fabric, telecommunications equipment, wheat,
gas/electricity, transistors, and plastics

f. Amount of Foreign Direct Investment (FDI): $3.2B (in 2015)

g. Gini-Coefficient of for the past 5 years:

2006 40.72

2000 40.64

1998 39.46

1990 39.2

1984 39.19
Based on the gross domestic product (GDP) where more than three fourths of the countrys
product is dependent on trade, the impact of trade for Morocco is significant. The country relies
heavily on exports to drive the economy. It promotes economic growth by creating increases in
GDP and GDP per capita. However, this growth is not an equitable distribution of income and
the increasing Gini coefficient is representative of increasing income inequality. Trade has
allowed the country to experience growth however has also increased the wealth gap.

Mozambique (Less Developed Nation)

a. GDP per Capita for the past 5 years:

2015 529.243 USD

2014 623.198 USD

2013 605.234 USD

2012 564.812 USD

2011 524.891 USD

b. GDP growth rate for the past 5 years:

2014-2015 -15.076%

2013-2014 2.968%

2012-2013 7.157%

2011-2012 7.607%

c. Percentage GDP from trade: 99.96%

d. Ratio of exports to imports: $7.27B : $10.3B (in 2014)

e. Composition of exports and imports:

- Exports: raw aluminum, aluminum bars, petroleum gas, refined petroleum, coke
- Imports: Refined petroleum, raw aluminum

f. Amount of Foreign Direct Investment (FDI): $28,768.2M (in 2015)

g. Gini-Coefficient of for the past 5 years:

2008 45.58

2002 47.04

1996 44.41

Based on the gross domestic product (GDP) where almost the entire countrys product is
dependent on trade, the impact of trade for Mozambique is crucial. It relies heavily on the
export of raw materials to sustain its economy and however still requires more imports than
exports resulting in a negative trade balance. Due to the large intervals between data points, it
is difficult to come to an accurate conclusion about the effects of trade of the Gini Index of
Mozambique however, it is evident that income inequality is a problem. Trade has negative
impacts on the Mozambique economy and has created a reliance on global trade to sustain the
economy, this creates an economy that is not sustainable and is also subject to fluctuations

Part B

Explain the term Transnational or Multinational Corporation (MNC).

Usually a large corporation incorporated in one country which produces and sells goods to
oversea countries. The two main characteristics of MNCs or TNCs are the sheer size of the
corporations and that their worldwide activities are controlled by a parent company.

Identify and explain the reasons for the growth of MNCs.

The expansion of market territories contributes significantly the the growth of MNCs where the
corporations contribute significantly towards the countrys GDP. In return, the national market
grows and expand, allowing the MNC to further establish and expand itself within the nation.
MNCs also often have more market superiorities that regular domestic firms do not and hence,
receive more benefits and opportunities to grow.

Explain the consequences for the growth of MNCs in the world

A significant consequence for the domestic country with established MNCs is that the domestic
firms are threatened and new firms have difficulty developing. In developing countries, MNCs
also manage to push domestic firms completely out of business. It is also possible for them to
take advantage of the natural resources and contribute towards pollution.