Global Trade: Energy, Agriculture, Manufacturing, and Labor
**The Flows of Global Trade**
**4.1 Energy Products**
The energy market is currently dominated by hydrocarbons (natural gas, petroleum, and its derivatives). The USA has to import oil because of its consumption, which puts it in competition with China in the oil market. They dominate the market. The trade of energy is equivalent to 10% of the world trade, and its strategic importance is such that states consider it a priority, both from an economic point of view and for security. Oil-importing countries, both developed countries that have their own production (USA) and countries that do not have their own production, such as Germany and Japan, have a marked dependence on oil, which explains the strategic importance of these products.
**4.1.2 Agricultural Products**
Cereals, coffee, cocoa, sugar cane, spices, tobacco, cotton, etc., are exploited in their native countries. Due to agricultural lawsuits, people are forced to move to the cities. In this market, two-way trade can be differentiated:
- Holdings of products from developed countries: This is in the hands of five large producers, which comprise 90% of farms of wheat, barley, and oats. Thousands of hectares are used. The USA, Canada, and Argentina (the only country that helps Spain) are the main benefactors. In the 1920s, it was the USA and Australia.
- Exporters of products from undeveloped countries: These countries mainly produce coffee and cocoa. Examples include Brazil, Colombia, Ghana, Nicaragua, and Madagascar. These products are exported through major distributors to developed countries. Spain is self-sufficient in many products but not in cocoa or coffee, so it uses this type of export.
The problem with these southern countries is that the placement of their products necessarily goes through the international market via the stock exchanges of the northern countries. The main stock exchanges for cereals, sugar, cocoa, and coffee are in Chicago, New York, London, and Paris, where large multinational companies dominate exclusively. This means that most of these countries have financial problems because they are small producers who cannot get a fair price for their products. They are employees who work on large plantations of multinationals for miserable wages.
The stock market is where commodities, company shares, or other properties are publicly traded. For example, Mercabarna.
**4.1.3 Manufactured Products**
Manufactured products generate the largest volume of trade globally, around 75% of the total. The most outstanding products are in the automotive industry, computing, electronics, transport materials, and telecommunications. The main producing areas are Western Europe, the USA, and Japan. However, in the last decades of the 20th century, South Korea, Taiwan, Hong Kong, and Singapore have experienced great development in leading industries (the 4 dragons). These countries lead the group of newly industrialized countries and have two characteristics: they are dominated by authoritarian political regimes and have plenty of cheap labor. The major companies are moving there.
**4.2 The Workforce**
People often move long distances to find a job. The immigration program: from 6 in the morning they are well seen (to do the work that we do not want to do), at 6 o’clock they are frowned upon.
Markets beyond: In the mid-19th century, Chicago had a big stock exchange. The problem is the distances. Traveling 100km in Spain is a journey, but 1000km in Chicago is not. It is not true that anything harvested in the future can be sold in the future. For example, wines from Alella are sold 10 years after harvest; that is the future market.
**4.2.1 Labor Migration Trends**
Until 1970, labor migration was long-distance and continuous. With the economic transformation of the late 20th century, migration has become more regional and temporary. This fact implies that all this rich region is linked to a periphery that provides a significant portion of its working class and that is not bound forever to the country where it has gone.
**3. Organizations Governing World Trade**
It cannot be said that there is complete freedom of trade, primarily due to:
There is no freedom of trade for agricultural producers in developing countries, who cannot negotiate the prices of crops on an equal footing with the larger companies that dominate the market.
States tend to associate with neighboring states to get preferential treatment in trade, thereby harming countries not belonging to these associations.
Examples:
- The European Union (EU)
- The Association of Southeast Asian Nations (ASEAN)
- The Southern Common Market (MERCOSUR)
**3.1 The World Trade Organization (WTO)**
Ideally, there should be global trade where any country can trade with any other. In the 20th century, an organization was created in 1947 through the General Agreement on Tariffs and Trade, better known by the acronym GATT. In 1995, it was amended, creating the World Trade Organization.
**3.2 Multinational Corporations**
Basic features:
- The existence of plants in different states. It is crucial to assess the overall performance of the company.
- Leadership in organization, management, advertising, etc.
- The diversity of production centers, which allows them to reach more markets and exploit the existence of cheap labor.
- The availability of resources for large investments in research and development of new technologies.
- Great knowledge of the organization and policies of the states where they are installed to influence them in the most convenient way for their interests.