4.1.5 Trading Blocs

Question 1

What is a trading bloc

Answer 1

A group of nations that have agreed to work together to reduce/remove protectionist policies between the nations within the bloc

Question 2

what are the advantages of a business operation in a trade bloc

Answer 2

• removal of trade barriers may reduce costs or cause a surge in demand
• fewer regulation means access to materials and labour is easier, this boosts the efficiency and quality of production
• expanding market for products
  -greater competition forces firms to be more efficient

Question 3

What are the disadvantages for a business operating within a trading bloc

Answer 3

• More expensive to import products from outside the bloc
• small firms may be forced out by the increased competition that comes from elsewhere in the bloc
• a business may have to adjust operations to be in line with regulations, increasing costs

Question 4

What countries make up NAFTA

Answer 4

• Canada, the United States and mexico

Question 5

What is ASEAN

Answer 5

• a trade bloc made of 10 countries including, Malaysia, Indonesia and Thailand
• it is a free trade area

Question 6

What is the EU

Answer 6

• a group of 27 countries that is a single market with no barrier to movement of labour, products and capital