QUESTION-ANSWER PART

Question 1: Discuss the gradual impact of all of the four industrial revolutions on global trade
pattern.

Answer: The industrial revolutions had a major impact on global trade pattern. It took place in
the period from about 1760 to sometime in between 1820 and 1840. Basically it was the
development of technology and transition to new manufacturing process in Europe and United
States. The transition includes from the invention of steam engine to emergence of new source of
energy-electricity, gas and oil in the second industrial revolution followed by the rise of
electronics, telecommunications and computers in the third industrial revolution and lastly
emergence of internet in the fourth industrial revolution. It has been observed that people had
always been keen and dependent on technology. People has always used the technology and tried
to make their life easier and go on to the next level. The concept of Industrial Revolution came in
this pattern. Currently we are going through fourth industrial revolution which is known as
Industry 4.0.

The first industrial revolution: The first industrial revolution started at the end of the 18 th
century to the beginning of the 19th.[CITATION iEd19 \l 1033 ]. Mechanization happened in this
period due to which agriculture became the backbone of the society. This mechanization was the
biggest change that happened in the industry at that period. Coal extraction increased due to this
and the first most important invention, the invention of steam engine happened at that period,
which helped in trading. Manufacturing of rail roads increased at that time due to mechanization.
With the help of steam engines, it was possible to trade agricultural goods from one place to the
other place. So, it was easy to carry the products from one place to another and make it available
to everyone at a lesser time than before. Hence the buyers could avail the products and sellers
could spread their products globally than just keeping them in one specific area.

The second industrial revolution: The second industrial revolution which started at the end of
the 19th century is considered to be the most important one. There was a huge technological
progression at this stage. We got some new sources of energy- electricity, gas and oil at this
revolution. Methods of communication improved through the invention of telegraph and
telephone. So industry overseas could communicate with each other and solve out their queries

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regarding business because of this telephone and telegraph. With the invention of planes, goods
can be easily transported from one country to another and at a shorter time. There are cargo
planes which re used to carry products from one place to another. With this trading has become
easier, less expensive than before and also time is being saved. Because of widespread use of
electricity, telegraph, widespread use of machinery businesses started to operate in large scale.
As production increased so selling also increased. During this revolution, steel became available
at a cheaper rate, which allowed to build larger bridges, railroads, skyscrapers and ships. All
these things made trading easier and saved cost.

The third industrial revolution: We got to see the emergence of the third industrial revolution
in the second half of the 20th century. This revolution brought forward the rise of electronics,
telecommunications and computer. Invention of computer has helped the business owners in
record keeping. Before these works used to be done manually and there were chances of making
mistakes. By keeping proper records it became easier to ensure the growth of the business. As
businesses were engaged in international trade, it became necessary to monitor everything and do
record keeping. For all these things, the impact on business sustainability started to came from
third industrial revolution. With the invention of new technologies, research increased which
helped businesses to survive in the market. Communication also became easier during this
period.

Industry 4.0 i.e. the fourth industrial revolution: The industrial revolution that is happening
right now is the fourth industrial revolution or Industry 4.0. It is the automation of traditional
manufacturing and industrial practices, using modern smart technology which is ongoing now.
[ CITATION Fou21 \l 1033 ]. People are using internet and machine-to-machine communication for
increased automation, improved communication and production of smart machines which can
figure out any issue without the intervention of human. Hence more production is possible at a
lesser time and it is being ensured that the products are of high quality. Global business has
flourished during this revolution. With the help of internet, customers sitting at home can see
what latest product is available in their home country or abroad. Hence they can order their
preferred products sitting anywhere causing profit to the businesses. Moreover we can see the
increases of small entrepreneurs as well. Large scale of people are doing business through online

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now. Employment rate is increasing and products are available globally as well. Worldwide
economies is based on the fourth industrial revolution.

So we can see that every industrial revolution has bought certain changes gradually. It brought
great progress on global trade. The invention of one revolution has improved more in the next
one.

Question 2: Discuss the impact of Brexit on the international trade pattern of EU.

Answer: The very first country to leave the European Union formally after having been a
member state of the European Union for 47 years was the United Kingdom. Brexit, which is the
nickname of “British Exit”, refers to the withdrawal of the United Kingdom from the European
Union and the European Atomic Energy Community at January 31, 2020. [ CITATION Bre21 \l
1033 ]. It was predicted by economists that Brexit will harm the economy of the country might
also reduce the real per capita income in the long run.

The European Union comprises of 28 European countries, which became 27 after the United
Kingdom left the Union. The purpose of this union is to cut down economic, trade and social
barriers and flourish business in between the countries.

Now let’s discuss the impact of Brexit on the international trade pattern of EU. Because of
Brexit, EU will not be able to import the goods without tax and tariffs from the UK which they
could have done before. As a result of tax and tariffs, the price of the imported products have
increased. Because of the withdrawal from the EU by the UK, the sectors across the EU which
will have the most negative impact are motor vehicles, parts of vehicles and electronic
equipment’. The reason is that UK is a large manufacturer of motor vehicles and parts depends
on an EU chain of supply for parts. [ CITATION Imp21 \l 1033 ]. These things have become more
expensive, availability of the products are often delayed and sometimes are no longer available.
Trading of processed foods are also affected as UK used to export large amount of processed
food across the EU. After tariffs and quotas have been applied to the good travelling between EU
and UK, it has become essential to determine the “origin of goods documentation”. This was not
required before. This has become a compliance burden for the traders. Companies now have to

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think about changing their suppliers or to relocate their production facilities somewhere else to
avoid all the complexities and administrative burdens in international trading.

The companies in the UK and EU whose trade routes and supply chain are informally connected
are facing great difficulties. Before Brexit, trade between EU and UK used to be done and
monitored by the EUs single market and Custom Union rules [ CITATION Sel19 \l 1033 ] . As such
goods and services could travel between EU and UK without any customs check or other border
facilities. But, after Brexit, the flow of trading among EU member countries has slowed down.

Because of Brexit, UK will not be contributing to the budget of EU. Thus EU will be losing
around nine billion pound which was the annual net contribution of UK to EU. Hence EU might
have to reduce the rate of providing financial assistance to its member countries.

Those who will travel between the EU and the UK will have to show their passports at the border
which was not needed before. But, business travelers needed some additional requirements. If
they were doing business in any EU country, then they need to set up a local subsidiary at UK.
So we can see that the expenditure of those businesses will be rising.

So we can see inclusion of tariffs and tax, closing down of borders, slower down of import-
export, slow flow of trade etc. are the impacts occurred at the international trading pattern of EU
after Brexit.

Question 3: Analyze the Balance of Trade scenario of Bangladesh from 2010 to 2020. (In doing
so, please explain the export and import situation, the mostly traded goods in export and import,
and the countries with whom Bangladesh is having the major trade agreements). Please also
explain the impact of this status on the economy of Bangladesh

Answer: In order to analyze the Balance of Trade scenario of Bangladesh from 2010 to 2020 I
have given below export import- data of Bangladesh for the years 2010 to 2020 and it is given in
billions. On the basis of that I will be analyzing the balance of trade and also the export-import
situation of Bangladesh. For that I have shown the export-import data of the years in billions at a
glance and have mentioned the source underneath. Then I have prepared two charts- column

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chart and line chart to show the import vs export of the years. Both the charts have the same
information but through the line chart we can see the ups and downs of the trade situation of the
country more clearly. In the charts the red bars and red lines are indicating the exports of the
country and the blue bars and the blue lines are indicating the imports of the country.

Source: Bangladesh Imports 1960-2021

Bangladesh Exports 1960-2021
Bangladesh Total Imports
Bangladesh Exports fall in 2020

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 Year by Year
Expor t vs Impor t
Export Import
70
60
50
40
30
20
10
0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Figure: Bangladesh Import-Export 2010-2020 (Column Chart)

Figure: Bangladesh Import-Export 2010-2020 (Line Chart)

Balance of trade refers to the value of goods exported minus the value of goods imported for a
given time period. [ CITATION Aar21 \l 1033 ] . As we can see in the charts containing the data from
2010-2020, the import of the country has increased every year from 2010. However there was a
drop in import in the fiscal year 2020. The export of the country has also increased every year
with a drop by few percentages in 2016, but it increased again from 2017. Owing to COVID-19,
the export again decreased in 2020. If we see the charts we can see that in every year imports has

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always been higher than exports. If the import of a country is more than its’ export than it runs a
trade deficit.[ CITATION Kim20 \l 1033 ] . Bangladesh always had a negative trade balance that is a
trade deficit ever since its independence. Its deficits has always been financed by international
aids and expatriates transfers. According to the data collected by the Central Bank of
Bangladesh, the trade deficit of Bangladesh were broadened by 5.4% in the first half of the fiscal
year 2019-2020. [ CITATION For21 \l 1033 ]

Export Situation of Bangladesh, mostly exported goods and the countries with whom
Bangladesh having major trade agreements:

Export refers to the value of all goods and services that a country is providing to the rest of the
world. Bangladesh exports less quantity of goods and services to countries than it imports. If we
look at the charts that contains data from 2010 to 2020, we can see that the exports of the country
has increased every year. So we can say the demand of our goods have increased every year and
we had to do production accordingly. But there was a drastic fall in our exports in the year 2020
compared to the previous years. Just like every other country, the export situation of Bangladesh
has been largely affected because of COVID-19. Bangladesh faced very high negative growth in
the financial year of 2019-2020 (about 17%).[ CITATION Sel20 \l 1033 ] Although it’s improving in
the current financial year i.e. 2021-2022, but it is not certain if the situation will get back to
normal. It will be tough to recover the export sector of Bangladesh if the economic recessions in
the United States and European Union doesn’t improve as these two are the main export places
of Bangladesh. As a least developed county, Bangladesh has got the benefit of having simple
procedures and rules and regulations to export their products to the European Union

As we all know, the export economy of Bangladesh is dominated by ready-made garments

manufacturing. Since 2004, the GDP growth rate of Bangladesh has been driven by exporting
ready-made garments, domestic agricultural sector and remittances. [ CITATION Eco21 \l 1033 ].
The other export items are leather, fish, frozen sea food, pharmaceutical, textiles, plastics, tea,
ship building and jute. Now-a-days Bangladesh is largely involved in business process
outsourcing.

Bangladesh is having major export agreements with The European Union, the United States and
China.

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Import Situation of Bangladesh, mostly imported goods and the countries with whom
Bangladesh having major trade agreements:

Bangladesh is largely involved in importing goods and services. Bangladesh always had
relatively high customs duty which often makes the products expensive. However, the
government is trying to reduce tariffs cost and other custom duties, but it will take some time.
Bangladesh acts as a passageway between the center of India and its Eastern Provinces.
[ CITATION Nor211 \l 1033 ] . From the charts containing data from 2010-2020, we can see that
import has increased in every fiscal year than the previous year. Owing to the population growth
and unavailability of products, the import has increased. However we can see a sudden fall in our
imports in the year 2020. COVID-19 has affected the trading pattern of the whole world. Border
were closed down, international flights which includes cargo flights were closed down and there
were lockdowns which resulted in fall of imports. The reduction in import was record low of –
50.7 % in April, 2020. [ CITATION CEI21 \l 1033 ]

The major imports of Bangladesh are petroleum, chemical materials, steel and metals, cement,
food and oil derived products and machinery equipment’. [ CITATION Nor21 \l 1033 ]

Bangladesh is having major import agreements with from Thailand, India, China, Indonesia and
Singapore.

Impact of this status on the economy of the country: Bangladesh is having a trade deficit as it
is importing more than it exports. So more amount of money is going out of our hand than the
amount of money we are earning. So our money supply is actually shrinking and currency is
getting weaken. The domestic nation is losing job and the number of job demand is more than
the availability of job. This has caused an impact on employment as well. Jobs are shifted abroad
as more goods are demanded from abroad than domestically. We can also see outsourcing of jobs
in the economy. However we can also see new entrepreneurs in the country. As the availability
of goods from abroad has increase, that too in a lower price, many entrepreneurs are bringing
products from abroad and selling them in the home country. Hence they are getting self-
employed and the country is also earning some money. There are chances of deflation and lose
of government finances when there is trade deficit in the country. As we can see that imports are
more than exports we can say that certain products are not avail be in the country or the
production of the exported products are costly in the country. Now if this continues the reserves
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of the country will be declining. Also huge level of currency exchange rate have already
weakened the domestic currency, no wonder goods and services costs are way higher in this
country than other country. So we need to increase our exports than imports in order to have a
control over the economy.

References:
Brexit. (2021, April 17).

Economy of Bangladesh. (2021).

Fourth Industrial Revolution. (2021, April 9).

Impact of Brexit on the European Union. (2021, April 14).

Institue of Entrepreneurship Development. (2019, 06 30). Retrieved from https://ied.eu/project-

updates/the-4-industrial-revolutions/

International Trade Administration. (2020, August). Retrieved from https://www.trade.gov/country-

commercial-guides/bangladesh-market-overview

Nordea. (2021, April). Retrieved from https://www.nordeatrade.com/en/explore-new-

market/bangladesh/trade-profile

Nordea. (2021, April).

Raihan, S. (2020, September 06). Covid-19 and the challenges of trade for Bangladesh. The Daily Star.

Yavuz, S. (2019). The UK-EU Brexit deal changes everything for global trade professionals.

(n.d.). Retrieved from Macrotrends: https://www.macrotrends.net/countries/BGD/bangladesh/imports?

fbclid=IwAR247uTCyxmQgjfW5H37NmKWOVWNSCWlr1Fpc1_MB88agmK3pnORXVWCRDQ

(2020, August 23). Retrieved from International Trade Administration: https://www.trade.gov/country-

commercial-guides/bangladesh-market-overview

(2021). Retrieved from CEIC.

Staff Correspondant. (2021, January 5). Bangladesh exports fall by 14.57pc in 2020. Newage Business .