4.1.5 trading blocs and the world trade organisation (WTO)

Question 1

definition of a trading bloc

Answer 1

a group of countries that join together and agree to increase trade between themselves

Question 2

definition of a free trade area

Answer 2

there are no trade barriers and can trade with other countries freely

Question 3

what is the world trade organisation (WTO)?

Answer 3

an international organisation that regulates world trade

Question 4

what is the WTO’s ideal trade?

Answer 4

non-discriminatory

free from barriers/protectionism

predictable

promotes fair competition

beneficial for developing countries

Question 5

what is the role of the WTO?

Answer 5

set and enforce rules of international trade

resolve trade disputes

provide a forum for negotiating trade liberalisation

to monitor further trade liberalisation

increase transparency of decision-making process

help developing countries benefit

co-operate with other major economic institutions

Question 6

how does the WTO conflict with trading blocs?

Answer 6

distort world trade

averse effects on non-member states

inefficient allocation of resources

increased protectionism

WTO loses power as trading blocs become more powerful