Ch 10

Question 1

What are the 5 forms of economic integration in regional markets?

Answer 1

1. Regional cooperation groups
2. Free Trade Area
3. Custom Union
4. Common Market
5. Economic/ Political Union

Question 2

What is economic union

Answer 2

Group of countries that band together to give themselves privileges of some type
(ex: free trade)

Question 3

What are the characteristics of regional cooperation groups

Answer 3

Govs agree to participate JOINTLY to develop basic industries beneficial to each economy
( European Coal + Steel Community)
AGREEMENT between countries to manage jointly
NOT a free trade agreement, NOT customs union or common mkt

Question 4

What are the characteristics of Free Trade Area

Answer 4

Countries build a wall around their borders, any type of trade that goes inside is free trade
Free trade= no tariffs (among member countries)
BUT each member is free to set its own external tariffs on imported products from outside the region
–> ex: German car–> Canada has a diff. tariff than German car–> US

Question 5

What are the characteristics of Customs Union

Answer 5

FREE TRADE among members + common external trade policy (members have the same external tariffs on imported products from outside the region)– MERCOSUR

** problem w. external tariff is deciding what it should be

Question 6

What are the characteristics of Common Market

Answer 6

FREE TRADE among members, common external tariffs, + mobility*
(free movement WITHIN that region of goods, persons, services, and capital among member nations)
ECC (old European Economic Communion)

Question 7

What are the characteristics of Economic Union/Political Union

Answer 7

Economic union: all of the above + HARMONIZATION of economic policies (EU 27)
Political Union: all of the above, + HARMONIZATION of political policies (EU 15)

Question 8

Do methods build upon themselves?

Answer 8

Yes

Question 9

Do methods build upon themselves?

Answer 9

Yes

Question 10

What are the 4 freedoms of the common market

Answer 10

Free movement of
1. goods
2. persons
3. services
4. capital among member nations

Question 11

How could you BEST classify NAFTA among economic forms?

Answer 11

Free Trade Agreement

Question 12

How best would you classify MERCOSUR and the ANDEAN PACT among these forms?

Answer 12

Customs union

Question 13

How best would you classify the European Union among these forms?

Answer 13

Economic Union

Question 14

Who were the participants in the Lome Convention of 1975 and what did it allow?

Answer 14

Trade and aid agreement between European Economic Community + 71 African, Caribbean, and Pacific countries
blows them to export goods, duty free, to European common mkt based on the provision that they do not compete with European goods

–> challenged by the US bc of bananas cheaper than theirs, quota system
Signed in Feb 1975

Question 15

What countries participated in the Treaty of Paris? What industries did the treaty regulate?

Answer 15

Belgium
Netherlands
Luxembourg
Germany
France
Italy
Regulated European coal + steel community

Question 16

What treaty created the European Common Market?

Answer 16

Treaty of Rome (1958)

Question 17

What branch of the European Union is responsible for administering the union?

Answer 17

European Commission

Question 18

What branch of the European Union represents the national governments and is supposed to argue for the national interests?

Answer 18

Council of ministers

Question 19

What branch of the European Union more closely resembles the Supreme Court?

Answer 19

European Court of Justice or the Court of Auditors

Question 20

What is the name of the meeting of the heads of government of the member states of the European Union with the president of the European Commission?

Answer 20

European Council

Question 21

What are the 3 sources of the revenue that is needed to run the European Union?

Answer 21

1. Value-add Tax (VAT): applied at every stage of the production of product
2. Import duties: common in the EU
3. Contributions as % GNP

Question 22

What happened on the way to the implementation of the Europe ’92 program?

Answer 22

Reunification of Germany

Question 23

What treaty established the European Single Currency?

Answer 23

maastricht treaty ( euro was created + community wide citizenship in 1991)

Question 24

How many countries were admitted on May 1998 to the European Single Currency Group (Eurozone)? How many belong now?

Answer 24

11 countries admitted on May 1998
20 belong now

Question 25

What condition must be met under the “Stability and Growth Pact” by the EU countries that have adopted the euro?

Answer 25

No country can have a budget deficit larger than 3%

Question 26

What country could NOT meet the stability and growth pact by the EU?

Answer 26

Germany

Question 27

How many countries belong today to the European Union?

Answer 27

27