Global trade

Global trade is the result of uneven distribution of materials and resources across the world. No single country has everything it needs and so countries need to trade with each other. Countries that rely on each other to trade goods and services are interdependent.

Sometimes, countries group together to help increase the volume of trade. The European Union is one example of a trading group (or trading bloc).

The global pattern of trade is uneven because:

most of the valuable trade happens between more economically developed countries (MEDCs)MEDCs generally import low-value goods from less economically developed countries (LEDCs)there is little trade between LEDCs, partly because they may trade similar productsnewly industrialised countries (NICs) are playing a larger role in world tradea lot of trade happens through transnational corporations (TNCs) with a head office in one country, operating in many countriesTransnational corporations

TNCs or multinational corporations (MNCs) are companies that operate in more than one country. They often have factories in countries that are not as economically developed because labour is cheaper. Offices and headquarters tend to be located in the more developed world. Unilever, McDonalds and Apple are all examples of TNCs.

When a TNC locates within a country, there are advantages and disadvantages.

Advantages of TNCs locating in a country include:

creation of jobsstable income and more reliable than farmingimproved education and skillsinvestment in infrastructure, eg new roads - helps locals as well as the TNChelp to exploit natural resourcesa better developed economic base for the country

Disadvantages of TNCs locating in a country include:

fewer workers employed, considering the scale of investmentpoorer working conditionsdamage to the environment by ignoring local lawsprofits going to companies overseas rather than localslittle reinvestment in the local areafactories are often footloose and jobs insecure. If labour costs increase, the company may move elsewherenatural resources being over-exploitedThe global chain

A product has a series of stages, linked from design to purchase. Each link in the chain may happen all in one location, or be spread globally. Large companies often have very complex chains. A company may also outsource some of the production, paying another company to make part of the product.

For example, HP laptops are assembled for sale in Kunshan, China. Manufacture of each laptop's printed circuit board (PCB) is outsourced to a company in Penang, Malaysia - this is called the first tier of outsourcing. The PCB requires parts, such as memory chips or a cooling fan. These can be sourced from other Malaysian factories and firms - this is called the second tier of outsourcing.

Because even the wire, screws and plastics used in the manufacture of each component part will need to be sourced separately, there are additional tiers of outsourcing.

The interactive graphic outlines a simple global chain.

The Role of Multinational Corporations (MNCs) in Water Resources

Introduction:
Multinational corporations (MNCs) are large companies that operate in multiple countries. These corporations have a significant impact on various aspects of the global economy, including water resources. MNCs play a crucial role in the management, utilization, and conservation of water resources worldwide.

Key Roles of MNCs in Water Resources:

1. Water Extraction:
MNCs often engage in water-intensive activities such as manufacturing, agriculture, and mining. These activities require significant amounts of water, which MNCs extract from local water sources. However, this extraction can lead to the depletion of water resources, especially in areas already facing water scarcity.

2. Water Pollution:
MNCs are also responsible for water pollution due to their industrial activities. Discharge of untreated or poorly treated wastewater into rivers and other water bodies can contaminate freshwater sources. This pollution not only affects the quality of water but also poses risks to aquatic ecosystems and human health.

3. Water Management:
Many MNCs have recognized the importance of sustainable water management and have implemented water conservation practices. They invest in technologies and infrastructure to reduce water consumption, reuse and recycle water, and treat wastewater before discharge. These initiatives help in minimizing the negative impact on water resources.

4. Community Engagement:
MNCs often engage with local communities in areas where they operate. They have the opportunity to contribute positively to water resource management by providing access to safe drinking water and sanitation facilities. MNCs can also support community-based initiatives for water conservation and promote awareness about sustainable water practices.

5. Partnerships:
MNCs can collaborate with governments, NGOs, and local communities to address water-related challenges. By sharing expertise, resources, and technology, they can contribute to the development of sustainable water management strategies. Partnerships can also enhance the transparency and accountability of MNCs in their water-related activities.

Conclusion:
Multinational corporations have a significant role to play in the management of water resources. While their activities can have negative impacts such as water extraction and pollution, MNCs also have the potential to contribute to sustainable water management through conservation measures, community engagement, and partnerships. It is crucial for MNCs to prioritize responsible water practices to ensure the long-term availability and quality of water resources for both present and future generations.