Th4.1: Types of Trading Blocs

Question 1

What is a regional trading bloc?

Answer 1

a group of countries within a geographical region that protect themselves from imports from non-members - they sign an agreement to reduce or eliminate tariffs, quotas and other protectionist barriers amongst themselves

Question 2

Most regional trade agreements take the form of…

Answer 2

bilateral agreements, between one single country and another single country

Question 3

Some agreements between three or more countries are…

Answer 3

multilateral or plurilateral agreements

Question 4

Preferential trading areas (PTA)

Answer 4

these are where tariff and other trade barriers are reduced on some but not all goods traded between member countries

Question 5

Free trade areas (FTA)

Answer 5

these occur when two or more countries in a region agree to reduce or eliminate trade barriers on all goods coming from other members. each member is able to impose its own tariffs and quotas on goods it imports from outside the training bloc

Question 6

Customs unions

Answer 6

a customs union usually involves the removal of tariff barriers between members and the acceptance of a common external tariff against non-members - this means that members may negotiate as a single bloc with third parties such as other trading blocs or countries

Question 7

What is an economic union?

Answer 7

the final step of economic integration. there will be a common market with coordination of social, fiscal and monetary policy

Question 8

What are the six types of trading blocs?

Answer 8

preferential trading blocs
free trade areas
customs unions
common markets
monetary unions
the Eurozone