Trade Agreements Flashcards
What is a Free Trade Area?
When trade barriers between countries are eliminated but each member country maintains its own tariffs against non-members.
What is a customs union?
The same as an FTA but with the addition that member countries impose a common externaln tariff against non-members.
What is a common market?
The same as a customs union but with the additional agreement to allow the free flow of capital, goods, services, and labour without restrictions.
What is an Economic/ Monetary Union?
Operating as a common market with the additional integration of a common tax system or currency.
What is an example of an FTA?
ASEAN.
What is an example of a Customs Union?
CARICOM
What is an example of a Common Market?
The EU.
What is an example of an Economic/Monetary Union?
The EU Eurozone.
What are some benefits of trade agreements?
Improves global peace and security and helps to reduce conflict.
Increases global trade and co-operation.
Encourages socio-economic devlopment in NEEs and LICs.
Economies of Scale.
International Status.
Employment
Investment.
What are some disadvantages to trade agreements?
Loss of sovreignity.
Increased competition.
Increased Dependance.
What countries are a part of the USMCA Free Trade Area?
The USA, Mexico and Canada.
Why is USMCA not a strong trade agreement any longer?
Donald Trump imposed 25% tariffs on non-USMCA compliant goods on Mexico and Canada on April 3rd 2025, and 10% tariffs on non-USMCA compliant energy sources such as oil.
Why has Donald Trump imposed tariffs on Mexico and Canada despite
