Ch. 76 Trading Blocs And Integration

Question 1

Name three main trading blocks?

Answer 1

EU
NAFTA
ASEAN

Question 2

Two benefits of trading blocks?

Answer 2

• static benefits (specialisation)

- dynamic benefits (transfer of resources and competition)

Question 3

Five disadvantages of trading blocks?

Answer 3

Distracts from making free-trade a quick agreements with WTO

Can distribute gains unequally

Some trade agreements are only across a few goods so the effect is minimal

They can create more trade diversion than creation sometimes

Loss of national sovereignty and independence

Question 4

Define trading block?

Answer 4

A group of countries which have signed an agreement to reduce or eliminate tariffs, quotas or other protectionist barriers between themselves.