3.2 World Trade Organisation Flashcards
When there is a trade agreement…
The countries agree to trade freely (free trade) with no tariffs nor barriers.
What are the three types of trade agreements?
Bi lateral
Regional
MultiLateral
What is a Bi Lateral trade agreement?
2 countries
What is a Regional trade agreement?
An area of countries nearby
What is a multi lateral trade agreement?
Countries scattered.
What are the three types of trading blocs?
Free Trade Area FTA
Customs Union
Common Market
What is a Free Trade Area?
Two or more countries with no trade barriers.
However individual external barriers to non member countries are permitted.
What is a customs union?
No internal barriers, but a common set of external barriers.
What is a Common Market?
No internal barriers, but a common set of external barriers, with free movement of goods, capital and labour.
What are the advantages of trade blocs?
Greater access to markets
Greater employment opportunities
Stronger bargaining power in multilateral negotiations
Greater political stability and cooperation
What are the disadvantages of a trading bloc?
Challenge to multilateral organisations
Loss of Sovereignty.
