Trading blocs Flashcards
what is trade bloc
it is a group of countries that manage trade between them and usually lead to less protectionist barriers between the nations
Preferential trading areas
some goods have preferential access such as reduced tariffs, encourages trade of that specific good
free trade areas
a group of nations with very low barriers to trade so that trade is promoted
customs union
a group of countries that have free trade internally and the same external protectionist barriers
common markets
similar external barrier and free trade and free movement of labour internally
economic unions
where the economies of the member countries are included in the trade
free trade
no government intervention into international trade
single markets
free movement of labour, goods and capital for member countries
monetary union
nations share currency
trade creation
where consumers import more good due to lower prices as there are no tariffs
trade diversion
when trade agreements mean that imports come from higher cost nations so prices for imports rise, this is because the country doesn’t have the comparative advantage
common market
