Fig. 2 shows a country's Balance of Payments figures for three years. 2011 $bn 2012 $bn 2013 $bn Exports 700 600 600 Imports 600 640 B Balance of payments 100 A -80 Surplus or deficit X deficit deficit [Figure 2] Use Fig. 2 to help you to answer the following questions.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2014). The mark or mark type is shown in brackets.

1. [1] One mark for surplus.
2. [1] A–One mark for $–40 bn [1] B–One mark for $680 bn
3. [6] Level 2 (4-6 marks) Has discussed, with reference to the country's Balance of Payments figures, whether or not the government of the country should introduce restrictions on foreign trade and has given a reasoned opinion. OFR would apply from (a). (If there is no reference to the figures given, award 4 marks max) The country had a surplus in 2011 and then deficits in both 2012 and 2013. The deficit, at $– 80 bn in 2013, is double that of 2012 and total imports are gradually increasing so probably action of some kind needs to be taken. The government could increase import duty to make imported goods more expensive to bring into the country. It could introduce quotas on certain goods that are imported in large quantities so reducing the number coming into the country in any one year. To introduce an embargo on particular goods would probably not be necessary. If the government does this, it is likely that there may be some retaliatory measures taken by countries affected. If this country exports to these countries, they may introduce similar restrictions so exports will be reduced. The government's scope for action may also be restricted by membership of a trading bloc. If most of its imports come from within the trading bloc where free trade operates, it will not be able to do this. The government should consider other measures. It should try to encourage an increase in exports which seem to be rather static at $600 bn. It should offer assistance to exporters to look for other markets and to become more competitive. Then restrictions on imports may not be necessary. Level 1 (1-3 marks) Has commented on possible restrictions on foreign trade with / without reference to the country's figures and with / without an opinion. The country had a surplus in 2011. In 2013 it had a deficit. It should introduce restrictions. It could increase import duties. It could introduce quotas. Then imports will be reduced.
4. [3] Any three services offered to exporters × 1 mark each – • Secure storage • Bonded warehouses • Security • Good road / rail links into the port / transport • Wharves • Office accommodation • Container handling equipment / terminals • Lifting gear • Trollies • Customs inspection • Car parking • Cranes • Outside storage areas. Any other relevant service relating to exporters.
5. [4] Any four points × 1 mark each and up to 2 marks for a well-developed point – • Containerisation of goods has enabled the goods to be packed at the factory and not unpacked until they reach their destination • It has enabled the groupage of mixed cargo so small quantities of goods can still be sent using a container • The container protects the goods against damage / weather / theft • The container acts as a method of storage and can be left in the open air • Mechanised handling of containers has speeded up the movement of goods • Containers can be transhipped between different kinds of transport so speeding up the movement of goods. Any other relevant point.
6. [4] Any four points × 1 mark each and up to 2 marks for a well-developed point – • Customs officers check goods being packed into containers at the factory and again at the destination • Customs officers supervise bonded warehouses in which dutiable goods are stored • Customs officers collect import duty on goods entering a country • Customs officers collect statistics on international trade such as value and volume of goods and country of origin • Customs officers supervise the movement of goods across borders to prevent smuggling • Customs officers inspect the documents associated with international trade e.g. bill of lading, invoice, certificate of origin • Customs officers enforce restrictions such as quotas • Customs officers are found at country border crossings. Any other relevant point.