4.1.5. Trading Blocs

Question 1

Trading bloc

Answer 1

Group of countries that sign up to free trade between them, protected by tariff walk against imports from outside

Question 2

Dumping

Answer 2

Describe the practice of selling off excess production in foreign markets at an exceptionally low price which destroys sales for local producers

Question 3

EU and the single market

Answer 3

-Having a single currency eradicates any concerns that businesses may have over exchange rate fluctuations

Question 4

ASEAN

Answer 4

Operate in Asia

Question 5

USMCA (NAFTA)

Answer 5

Three members-Mexico, Canada, USA

Question 6

Impact on businesses of trading blocs

Answer 6

Can’t generalise impact of trading bloc on all businesses

+ves:
-Free movement of goods
-External tariffs insulate competition from another part of world
-Government need to provide infrastructure support

-ves:
-Competition increases due to freer trade
-New rules and regulations need to be agreed before creating new market
-Geographically close bloc there may be common factors that together become common problem ie. Low commodity prices etc.