Trade Blocs/Agreements Flashcards
Differences between OPEC and APEC.
OPEC is a group of countries that produce significantly more oil than they demand.
(OPEC = Organisation of Petroleum Exporting Countries)
APEC is a group of countries within a trade bloc that are not linked by any one commodity.
(APEC = Asia-Pacific Economic Co-operation)
Define a trade bloc.
A type of intergovernmental agreement where regional barriers to trade are reduced or eliminated among the participating states.
List some advantages of trade blocs.
Increases trade.
Reduces prices for consumers.
Opens up a larger market - than a single country.
Greater negotiating power.
Increased profit and decreased inequality.
List some disadvantages of trade blocs.
Excludes countries outside of the bloc.
Greater dependence on each other.
Shared rewards.
Loss of national identity.
Some inequality may remain.
What is the EFTA?
A regional trade organisation and free trade area consisting of Iceland, Liechtenstein, Norway and Switzerland.
It was formed in 1960.
Overall it’s been successful - foreign trade volume increased from $3.5 billion to $8.2 billion within 8 years.
What is the EU?
It is a trade bloc with 28 members ( originally starting with 6).
The UK joined the EU in 1973 - 16 years after the common market was established.
In 2007 the EU became the world’s largest economy with a gross GDP of $14.4 trillion.
The UK voted to leave the EU in 2016 due to the EU’s laws on immigration.
What is the purpose of the G20?
To give a voice to major developing economies that felt the WTO was not fully serving their interests.
Who is in NAFTA?
The USA, Canada and Mexico.
What is OPEC?
A group of 15 countries that are significant oil-exporting developing nations. Around 82% of global oil reserves are located in OPEC member countries. It was set up in 1949.
What is SAARC?
The South Asian Association for Regional Cooperation is a trade bloc involving Southern Asia and was established in 1985. Overall it has been beneficial to member countries.
What is Mercosur? How effective is it as a trade bloc?
Its a South American trade bloc formed in 1991.
It has been highly criticised as the smaller countries often get overruled by Brazil and Argentina. There have been many disputes among the members of Mercosur. Also only 4 of the 10 members are full members - the associate members have very little influence.
