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3.2.4 - Globalisation GapFill
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The world is becoming more interconnected, which is being driven by the and the fact that businesses are trading overseas and producing goods and services for international markets. We call this process globalisation, and it has meant the growth of (MNCs) with offices or factories in other countries.
An is a product made overseas and brought into the UK. Other countries make appealing products that British people would love to use, try, eat and experience. A business does not have to manufacture anything; it can simply import unique goods from abroad.
An is a product or raw materials that the UK sells to overseas markets. For example, a business in America may buy steel from the UK as a raw material that it will use in production of other goods.
A business may decide to move the whole business overseas and change location. This may be because the cost of the in the home country is too high and goods cannot be manufactured economically enough to be competitive in a global market.
The main advantage of is that UK-produced goods do not have to pay the tariff and so are likely to be cheaper and more popular with UK customers. Tariffs allow UK businesses to sell more because they gain a price advantage compared to imported products. Tariffs can protect new businesses from being swamped by competition from multinationals. However, tariffs on imports may just increase the price to consumers of goods that they would have purchased anyway. For example, French cheeses such as Brie and Camembert have to be imported.
Exchange rates also have to be considered. This means the and can affect the price the customer in the UK pays for an imported good.