trading blocs

Question 1

define trade liberalisation

Answer 1

the process of breaking down trade barriers and making trade easier

Question 2

define trade bloc and the aim

Answer 2

A trading bloc is a group of countries that trade freely with
reduced or no tariffs and quotas on trade between businesses in these countries

Question 3

joining a trade bloc leads to trade creation.
what does that mean?

Answer 3

Trade creation means that businesses are able to enter new markets which can lead to an increase in sales volume and sales revenue

Question 4

the European Union (EU)

Answer 4

• 28 countries in the union
• member = free movements of goods and people
• Countries within the union have no trade restrictions between themselves
• Countries within the union have common external barriers (e.g. tariffs) to countries outside of the union

Question 5

Association of Southeast Asian Nations (ASEAN)

Answer 5

• it does not allow for the free movement of people between the countries, whereas the European Union does
• A free trade area aims to achieve free flow of goods in the region (eliminating trade barriers)

Question 6

North America Free Trade Agreement (NAFTA)

Answer 6

• Canada, Mexico and the USA.
• many usa businesses relocated to mexico = cheaper
• and then moved goods bak to usa