4.1.5 Trading blocs Flashcards
Trading blocs
An agreement between nations to reduce/eliminate barriers such as tariffs and quotas
What is there various of that exists between countries and regions
(red book)
there are various different arrangements that exist between countries and regions
What are the 3 trading blocs you should know of?
Free trade area/ agreement
Common Market
Single Market
Free trade agreement (exists where)
- Which Trading bloc has a free trade agreement
NAFTA (USMCA) - United states, Mexico & Canada
Exists where all member remove all trade barriers between themselves, but each member keeps different barriers against non member states.
Features of free trade agreement
- no common external tariff
- No free movement of good,labour & capital
- But there is No internal trade barriers betweeen the countries
Common external Tariff
an import tariff applied equally by each countries in a common/single market
e.g. the EU might impose a common tariff on imported whisky from Japan.
Members in a free trade agreement
All have do not have what in common
Effect of this (effect on businesses importing their goods)
Do not have a common external tariff
Some Businesses may still be able to import their products more freely into one of those countries
Common Market
What trading bloc is a Common Market
ASEAN - Association Southeast Asian Nations
Features of common market -4
- no internal trade barriers
- Common external tariff
- allows free movement of labour, capital as well as goods (between member states) - workers can relocate as a result
- all of this integration means members must work together on economic and political policy
Single Market
What trading Bloc is a single market
EU
Features of single market
- no internal trade barriers
- Common external tariff
- allows free movement of labour, capital as well as goods (between member states) -> workers can relocate as a result
- Borders, Common laws, taxes are harmonised as much as possible so it doesn’t interfere with commerce between members
