Ch 10 Flashcards
What are the 5 forms of economic integration in regional markets?
- Regional cooperation groups
- Free Trade Area
- Custom Union
- Common Market
- Economic/ Political Union
What is economic union
Group of countries that band together to give themselves privileges of some type
(ex: free trade)
What are the characteristics of regional cooperation groups
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
What are the characteristics of Free Trade Area
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
What are the characteristics of Customs Union
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
What are the characteristics of Common Market
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)
What are the characteristics of Economic Union/Political Union
Economic union: all of the above + HARMONIZATION of economic policies (EU 27)
Political Union: all of the above, + HARMONIZATION of political policies (EU 15)
Do methods build upon themselves?
Yes
Do methods build upon themselves?
Yes
What are the 4 freedoms of the common market
Free movement of
1. goods
2. persons
3. services
4. capital among member nations
How could you BEST classify NAFTA among economic forms?
Free Trade Agreement
How best would you classify MERCOSUR and the ANDEAN PACT among these forms?
Customs union
How best would you classify the European Union among these forms?
Economic Union
Who were the participants in the Lome Convention of 1975 and what did it allow?
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
What countries participated in the Treaty of Paris? What industries did the treaty regulate?
Belgium
Netherlands
Luxembourg
Germany
France
Italy
Regulated European coal + steel community
What treaty created the European Common Market?
Treaty of Rome (1958)
What branch of the European Union is responsible for administering the union?
European Commission
What branch of the European Union represents the national governments and is supposed to argue for the national interests?
Council of ministers
What branch of the European Union more closely resembles the Supreme Court?
European Court of Justice or the Court of Auditors
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?
European Council
What are the 3 sources of the revenue that is needed to run the European Union?
- Value-add Tax (VAT): applied at every stage of the production of product
- Import duties: common in the EU
- Contributions as % GNP
What happened on the way to the implementation of the Europe ’92 program?
Reunification of Germany
What treaty established the European Single Currency?
maastricht treaty ( euro was created + community wide citizenship in 1991)
How many countries were admitted on May 1998 to the European Single Currency Group (Eurozone)? How many belong now?
11 countries admitted on May 1998
20 belong now
What condition must be met under the “Stability and Growth Pact” by the EU countries that have adopted the euro?
No country can have a budget deficit larger than 3%
What country could NOT meet the stability and growth pact by the EU?
Germany
How many countries belong today to the European Union?
27
