Trade Blocs

Question 1

What are free trade areas?

Answer 1

Sovereign countries belonging to the free trade area trade freely among them but have individual trade barriers with those outside the area

Question 2

What are customs unions?

Answer 2

The countries are no longer sovereign over trade policy - there will be some unification of custom or trade policies and they have a CET (common external tariff) applying to all countries outside the union

Question 3

What is the common market?

Answer 3

This trading bloc is a customs union which has the free movement of factors of production between the countries without restrictions

Question 4

what is an economics union?

Answer 4

This is a common market where th4e level of integration us more developed - the member states may adopt common economic policies, they may have a fixed exchange rate or a single common currency

Question 5

What is a CET?

Answer 5

The common tariff that members of a customs union, common market or economic union impose on non-members