Trade blocs advantages and disadvantages Flashcards
How do trade blocs increase trade
Increase trade and access to markets by removing tariffs, taxes and quotas on trade
between members
All of this will also help to boost job creation and economic growth
By joining together to negotiate trade deals they gain bargaining power and bulk discounts
– better trade deals
How DO TRADE BLOCS HELP tnc’S
TNCs have access to a larger market so they will gain more economies of scale becoming
more competitive
How do trade blocs protect native goods
how much money’s worth of bras were blocked from china to eu
By putting tariffs, taxes and quotas on non-members (making foreign goods more
expensive) – this will encourage consumers to buy goods from within the trade bloc – this
is called competitive advantage
Protects firms in the trade bloc from cheaper producers outside the bloc – 2007 EU Bra
wars! (£50m Chinese imports blocked)
How are trade deal better for relations
By joining together to negotiate trade deals they gain bargaining power and bulk discounts
– better trade deals
How can trade blocs be anti globalisation
By putting tariffs, taxes and quotas on non-members it discourages trade and
interconnection with the world outside the blocs (anti-globalisation?)
How can trade blocs be unfair for consumers
Also by putting tariffs, taxes and quotas on non-members (making foreign goods more
expensive) – this will raise prices for consumers
How can interdependence from trade blocs be a bad thing
talkabout russia and 2008 usa
Due to greater interdependence, a problem in one nation in the trade bloc will cause
others problems too
e.g 2008 crisis falling US house prices and a rising number of borrowers unable to repay their loans effected entire world
How are trade blocs unfair for weaker nations
Some feel trade blocs can are too big and powerful, crushing smaller, poorer nations and
firms
Others feel they take power away from national governments and mean a loss in
sovereignty – interfering in too many areas
