Theme 4- Trading Blocs

Question 1

What is a trading bloc?

Answer 1

Associations between governments to promote and manage trade for a particular region.

Question 2

3 facts about NAFTA

Answer 2

• made up of Canada, Mexico and
  US
• barriers to trade were reduced
  between the members but
  individual countries could still
  impose them on outside
  countries
• replaced by USMCA

Question 3

3 facts about ASEAN

Answer 3

• Made up of 10 countries
• Free trade area
• allows some free movement of
  labour and capital between the
  member countries

Question 4

3 facts about the EU

Answer 4

• single market with no trade
  barriers
• Allows free movement of labour
  and capital
• Uses the euro in most members

Question 5

Advantages for businesses in a trade bloc

Answer 5

-businesses can obtain supplies
cheaper due to the removal of
trade barriers
- Easier to obtain materials,
labour and capital
- more skilled workers
- Expanding market= economies
of scale
- Increased competition= firms
are more efficient
- Tariffs protect firms from
international competition

Question 6

Disadvantages for businesses in a trade bloc

Answer 6

• More expensive to import
• Small firms may be forced out
  due to larger firms elsewhere in
  the bloc
• adjustment of operation to
  comply with rules and
  regulations