4.1.5 Trading blocs

Question 1

What is a trading bloc?

1

Answer 1

• Group of countries who sign up to free trade, protected by tariff wall

Question 2

Attractions of trading blocs?

2

Answer 2

• Harmonisation of laws = 1 product meet all legalities in mem countries (EOS)
• ^Collective power to stand up to non-member countries using dumping

Question 3

What is dumping?

1

Answer 3

• Selling off excess production in foreign market for v low price, destroys sales for local producers

Question 4

Benefits of trading blocs?

3

Answer 4

• > Prices
• Tariff walls insulate firm from comp
• Potential free movement of labour

Question 5

Drawbacks of trading blocs?

3

Answer 5

• ^Comp due to freer trade, those w monopoly power
• Rules/regulations (min wage rates)
• Geographically proximate bloc = same problems e.g. >commodity prices

Question 6

Which countries are in ASEAN’s trading bloc?

10

Answer 6

• Brunei
• Cambodia
• Myanmar
• Laos
• Malaysia
• Thailand
• Vietnam
• Philippines
• Indonesia
• Singapore

Question 7

Which countries are in NAFTA’s trading bloc?

3

Answer 7

• USA
• Mexico
• Canada

Question 8

When did the ASEAN trading bloc start?

1

Answer 8

• 1958