At the start of 2010 a new free trade area was established incorporating China and the six founding members of the Association of South East Asian Nations (ASEAN). These countries are Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The aim is to eliminate 90% of imported goods. This deal created the largest trade area in the world, with nearly 1.9bn people. Although there are undoubted gains there have also been warnings from South East Asia that some industries are not ready to compete with China and that jobs will be lost. Question: What factors determine the extent to which industries within a country gain or lose?
At the start of 2010 a new free trade area was established incorporating China and the six founding members of the Association of South East Asian Nations (ASEAN). These countries are Brunei, Indonesia, Malaysia, Philippines, Singapore, and Thailand. The aim is to eliminate 90% of imported goods. This deal created the largest trade area in the world, with nearly 1.9bn people. Although there are undoubted gains there have also been warnings from South East Asia that some industries are not ready to compete with China and that jobs will be lost.
Question:
- What factors determine the extent to which industries within a country gain or lose?
Answer -
Factors determine the extent to which industries within a country gain or lose:-
1. Manufacturing industries:- The countries with good manufacturing capacity will gain from the free trade areas. Because these countries will fulfill the domestic demand as well as cater the foreign demand too. Where as the countries with weak manufacturing capacity will lose from these free trade area.
2. Skilled workforce (Service industries):- The countries with skilled workforce able to generate more out put than those countries who don't have them.
3. Infrastructures:- Countries with proper infrastructure can cater the increase in demand will gain from these free trade areas where as countries with poor infrastructure will suffer from it as. They will loose there domestic market to other countries
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