Globalisation, International Trade and Economic Co-operation
H2 Economics - syllabus 9570, 2026
Explain globalisation, why countries trade, the effects of trade on consumers, producers and the economy, and evaluate protectionism and trade agreements.
- What globalisation means
Globalisation is the growing integration of economies through trade, investment and the movement of people.
- What drives globalisation and deglobalisation
Cheaper transport and communication and lower trade barriers drove globalisation; tensions and supply risks are now pushing some of it back.
- Comparative advantage
Countries gain from specialising in what they produce at a lower opportunity cost, even if another country is better at everything.
- How trade affects consumers
Trade gives consumers lower prices, more choice and better quality, but some also lose jobs or income.
- How trade affects producers
Trade gives firms bigger markets and cheaper inputs, but exposes others to stronger competition.
- Foreign investment
Foreign direct investment brings capital, technology and jobs, but can also bring risks.
- Movement of workers
Foreign workers ease labour shortages and bring skills, but can affect local wages and put pressure on infrastructure.
- Openness and the macroeconomy
Openness brings growth, but also makes Singapore vulnerable to shocks from abroad.
- The tariff diagram
A tariff raises the domestic price, so domestic producers supply more, consumers buy less, and imports fall.
- Who gains and loses from a tariff
Consumers lose, domestic producers and the government gain, and the country as a whole is worse off.
- Other forms of protection
Quotas, subsidies to local producers and regulations also protect domestic industries, with different effects on who pays.
- Arguments for protection
Protection is sometimes argued for infant industries, jobs or strategic reasons, but the arguments are often weaker than they seem.
- Trade agreements
Free trade agreements lower barriers between members, expanding markets, but the gains depend on firms actually using them.
- Judging trade policy
Openness brings large overall gains; the key is to spread them fairly and build resilience against disruption.
- Model essay (a): why tariffs, and who gains or loses
A top 10-mark answer, written in about 20 minutes, gives real reasons for a tariff, then traces its effects on each group with a labelled tariff diagram.
- Model essay (b): trade deals or competitiveness?
A top 15-mark answer, written in about 30 minutes, weighs new trade deals against stronger firms at home, and judges by the scale of protection and the time frame.
- Case study practice: when factories move
A whole H2 case study: 30 marks, about 75 minutes in the exam. Answer every part, then compare with the suggested answers.
What you will be able to do
I can define globalisation as rising trade and flows of capital and labour, and explain what drives it.
Syllabus 9570, 3.3.1(a). Globalisation, International Trade and Economic Co-operation: Globalisation as the increased trade of goods and services, and flows of capital and labour between countries; Factors affecting globalisation
Taught in What globalisation means, What drives globalisation and deglobalisation, Foreign investment, Movement of workers
I can explain why countries specialise and trade, using comparative advantage.
Syllabus 9570, 3.3.1(b). Globalisation, International Trade and Economic Co-operation: Basis of free trade and specialisation
Taught in Comparative advantage, Case study practice: when factories move
I can weigh the benefits and costs of free trade and open flows for consumers, producers and governments.
Syllabus 9570, 3.3.1(c). Globalisation, International Trade and Economic Co-operation: Benefits and costs of free trade and flows of capital and labour on:; Consumers - Prices, choice and variety of goods and services; Producers - Size of markets, degree of competition, cost of production and innovation; Government - Macroeconomic objectives (and policy choice)
Taught in How trade affects consumers, How trade affects producers, Foreign investment, Movement of workers, Openness and the macroeconomy, Judging trade policy, Model essay (b): trade deals or competitiveness?, Case study practice: when factories move
I can weigh the benefits and costs of protectionism.
Syllabus 9570, 3.3.1(d). Globalisation, International Trade and Economic Co-operation: Benefits and costs of protectionism
Taught in The tariff diagram, Who gains and loses from a tariff, Other forms of protection, Arguments for protection, Model essay (a): why tariffs, and who gains or loses
I can explain why a government may sign trade agreements or protect its industries to meet its aims.
Syllabus 9570, 3.3.1(e). Globalisation, International Trade and Economic Co-operation: Governments may decide to engage in economic co-operation and trade agreements between countries or impose protectionist measures to achieve macroeconomic aims
Taught in Trade agreements, Judging trade policy, Model essay (b): trade deals or competitiveness?
Original teaching notes