Compartive/absoulte advatage --- DOHA (1 Viewer)

[lilkiwicutie89]

heys
i was revising eco . im still having trouble with the Compartive/absoulte advatage
like the denfition is mixing me up .. can you give me a easier denfition ? please

and What is DOHA btw? i rad so many articles in fin. review and dont know waht it is


thanks .. =]

lilkiwicutie89 xoxo

 

[Sparcod]

Doha Round: Talks in Doha, Qatar negotiating about lowering trade barriers in world trade. Part of WTO negotiations.

Absolute Advantage: when a country can produce more goods than another.
Comparitive Advantage: when a country can produce goods more efficiently or at a lower oppurtunity cost than another.

A country must consider producing whatever goods they have a comparitive advantage in and must specialise in it to generate the greatest output possible at the lowest costs.

Hope that helps. I haven't been revising much so can you confirm that?

 

[whatdafork]

The Doha Round of WTO trade talks is aimed at reducing trade barriers around the world (in particular argricultural subsidies) and achieving free trade. It's also been focused on equalising the playing field for developing and developed countries by making trade fairer.

It's referred to as the Doha because this round of trade talks first began in Doha, Qatar. Same with the previous, Uraguay Round.

 

[Catwalk]

absolute advantage - QUANTITY (eg. aus produces 50 bananas whilst india produces 40. aus produces 70 apples whilst india produces 50. aus has an absolute adv in the production of both bananas and apples)

comparative advantage - EFFICIENCY (aus may be able to produce more bananas and apples than india, but it isn't as efficient at producing bananas as it is at producing apples (work it out using opportunity cost ratio) so therefore aus has a comparative adv in the production of apples)

(stupid example, i know! )

 

[Sparcod]

i must suck, you guys gave better solutions. I must revise.

 

[lilkiwicutie89]

thanks guys =]


really need to study i have an assesment on The Global Economy in week 3

thanks again xoxo

 

[Demandred]

To add:

Adam Smith poineered absolute advantage based on his specialisation principles.

David Ricardo poineered comparative advantage and basically re-written what Adam Smith said.

Doha is the WTO round of negotiations, primarily aimed at liberalising agriculture. EU basically said that they would not let go of their Common Agricultural Policy (CAP), which provides bloody huge surpluses to EU farmers to overproduce and dump surpluses onto the international market, this basically killed off many developing nations who produces agriculture more efficiently than the EU, but is unable to compete with the surpluses dumped onto the market. Basically EU told the developing nations to fuck off, resulting a collapse of trade talks, not a pretty sight

The recent WTO talks at Hong Kong has confirmed that the EU is still not letting go of their CAP. Why? Cultural reasons, apparantly food is very important to the European way of life and dread at becoming a fast food culture - how many McDonalds do you see in the EU?

 

[mitsui]

adds onto the reason y EU keeps the CAP:

it is majorly due to its tourism industry, apparantly havin crops everywhere make the place more attrative

also, US refused to reduce its agricultural subsidies, becoz the farmers at US r very powerful politically and a reduction in its subsidies will danger the position of the current president.

(correct me if i am wrong, but apparantly G20 walked out of the latest Doha meeting in protest to disappointment in the little agricultural reduction? thx)

 

[Demandred]

So there you go, hypocrites!

 

[Sparcod]

It's called: trade diversion.
European farm produce is slumping due to cheaper imports from Africa and Asia.
Within trade blocs, the tariffs are going down. Trade with a country outside the trade bloc usually bears higher tariffs.

Don't the govts buy surplus agricultural goods to stop the price from falling?If that aint true, I mustve been daydreaming.

 

[mitsui]

hmm i am not sure if they buy the overproductions
... dont they juz dump it
since they r alreadi paying subsidies anyway?