4.1.5 Trading blocs

Question 1

What is a trading bloc?

Answer 1

A group of countries who have n agreement to reduce tariffs, quotas and other protectionist policies.

Question 2

What are the pros and cons of being in a trading bloc?

Answer 2

Pros:
- Freedom to trade.
- Bigger market, EOS.
- Protection from international competition outside trade bloc.
- Freedom of movement of people.

Cons:
- Retaliation where other trading blocs may be made like NAFTA.
- May not cause trade liberalisation and just reduce barriers.