Dependence on production for distant export markets
Nature
The problem of dependence on production for distant export markets refers to the over-reliance of a country or organization on manufacturing or producing goods specifically for markets that are geographically far away. This issue arises when a significant portion of a country's or company's production is geared towards satisfying the demand of export markets that are located in different regions or even continents. This dependence can create vulnerabilities in the event of disruptions in these export markets, such as trade conflicts, political instability, or natural disasters. It can also lead to economic imbalances and a lack of diversification, as resources and efforts are disproportionately allocated towards meeting the demands of distant export markets, potentially neglecting domestic or nearby regional markets.
Incidence
Dependence on production for distant export markets has become a global problem as economies increasingly rely on international trade. According to recent statistics, in 2020, global merchandise exports accounted for 26.7% of the world's GDP, reaching a staggering $18.89 trillion. Developing countries, particularly in Asia, have seen a significant rise in their export-oriented industries. For instance, China's export sector accounted for 17.7% of its GDP, while Vietnam's exports represented 100.7% of its GDP. However, this heavy reliance on distant export markets has made these economies vulnerable to external shocks. The COVID-19 pandemic disrupted global supply chains, causing a 5.3% decline in global merchandise trade in 2020. This highlights the urgent need for countries to diversify their export destinations to reduce their dependence on distant markets and ensure economic stability.
Claim
As the change in farm organization from family farms to large corporate, industrialized farms increases, so does the dependence on production for distant and uncertain export markets.
Counter-claim
While some may argue that dependence on production for distant export markets is not a serious issue, it is important to consider the potential benefits that come with it. Engaging in international trade allows countries to diversify their economies, access new technologies and ideas, and foster economic growth. Additionally, relying on distant export markets can provide stability and resilience, as it reduces dependence on a single market. Therefore, the notion that dependence on production for distant export markets is a serious problem may be overstated.