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FR Business Eng > Trading Blocs > Flashcards

Trading Blocs Flashcards

1
Q

What is a trading bloc?

A

Regional groupings of countries

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2
Q

What does the word tariff mean?

A

A tax or duty to be paid on a particular class of imports or exports.

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3
Q

What are the various types of trading blocs?

A
  • Free trade area
  • Customs union
  • Single/common market
  • Monetary union
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4
Q

What is a free trade area?

A

grouping of countries within tariffs + non-tariff trade barriers between the members are abolished. BUT there is no common trade policy toward non-members.

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5
Q

What may be the benefits of free trade areas for consumers and producers?

A

For consumers access to :
- Less expensive
- Higher quality of g
For producers :
- Larger market of potential consumers

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6
Q

Give examples of free trade areas.

A

North American Free Trade Agreement (NAFTA)
European Free Trade Association (EFTA)
Canada and Europe Trade Agreement (CETA)

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7
Q

What does the word customs mean?

A

Taxes that you pay on imported goods (=tariffs)

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8
Q

What is a customs union?

A

Arrangement among countries in which members agree to do 2 things :
- Allow free trade on products within the customs union
- A common external tariff w/ respect to imports from the rest of the world Form of interdependence

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9
Q

What is a common market?

A

Provisions to liberalise movement of people and capital

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10
Q

What does trade creation mean?

A

Remove/reduction of tariff barriers => change in consumption :
o From a domestic high-cost producer
o To a foreign low-cost producer

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11
Q

What does trade diversion mean?

A

Removal/reduction of trade barriers => change in consumption :
o From low-cost producers outside the trading bloc
o To a higher cost (but tariff free) producers

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12
Q

What are the benefits of joining a trading bloc?

A
  • Larger market.
  • Develop economic and technical cooperation
  • Help countries achieve economies of scale
  • ++ political stability
  • Improve bargaining (= negotiating) power : better terms of trade for a trading bloc than for a single country.
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13
Q

Which countries did NAFTA include?

A

USA, Canada, Mexico

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14
Q

What did President Trump think of NAFTA?

A

Wanted to renegotiate NAFTA “worst trade deal”

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15
Q

What agreement has just replaced NAFTA?

A

In sept 2018, they replaced NAFTA by USMCA

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16
Q

What are non-tariff barriers?

A

Any measure, other than a customs tariff, that acts as a barrier to international trade.

17
Q

What is the free trade agreement between the EU and Canada? What does it abolish?

A

Comprehensive Economic and Trade Agreement (CETA) it was signed on October 30, 2016, and entered into force on September 21, 2017.

18
Q

What are the pros and cons of CETA?

A
  • Tariffs (taxes on imports) on most goods traded between the EU and Canada
  • Trade barriers in sectors such as services, public procurement, and investment
  • Restrictions on investment, including provisions on the protection of intellectual property rights
  • Technical barriers to trade, such as different product standards and regulations
  • Discrimination against EU and Canadian companies bidding for public contracts
  • Restrictions on the temporary movement of skilled professionals between the EU and Canada.
19
Q

What is ASEAN?

A

Association of Southeast Asian Nations (Indonesia, Singapore, Thailand, Malaysia, Philippines (1967) + Brunei, Cambodia, Lao, Myanmar, Vietnam)

20
Q

What is MERCOSUR?

A

It’s a South American trade bloc established by the Treaty of Asunción in 1991 and Protocol of Ouro Preto in 1994. Its full members are Argentina, Brazil, Paraguay, and Uruguay.

21
Q

What was the European Coal and Steel Community?

A

o 1952 : 6 countries : FR, Belgium, Luxembourg, Netherlands, Italy, West Germany
o Removal of all restrictions on trade in coal, steel and iron :
- Gain economies of scale
- More competitive and compete w/ US
- Political stability

22
Q

When was the EEC created? What sort of trading bloc was it?

A

o 1957 : Treaty of Rome : same member than ECSC
o Extend the ECSC to all products => Full common market : free trade in all products
o Common market of free movement of labour, enterprise and capital

23
Q

When did the EEC turn into the EU?

A

o 1993 : Maastricht treaty : EEC => EU

24
Q

What sort of trading bloc is the European Union?

A

The European Union (EU) is a customs union and single market, which means it is a type of trading bloc that allows for the free movement of goods, services, capital, and people between its member states.

25
Q

Give examples of common European policies at the economic and social level.

A

Economic level:
- The European Monetary Union (EMU)
- The European Stability Mechanism (ESM)
- The European Investment Bank (EIB)
- The European Semester

Social level:
- The European Social Fund (ESF)
- The European Pillar of Social Rights
- The Working Time Directive
- The General Data Protection Regulation (GDPR)

26
Q

What is CAP?

A

Common Agricultural Policy (CAP)
 Created in 1962 : to ensure food supplies for Europe + provide a fair income for European farmers
 Today : System of agricultural subsidies to support farmers : suffer from 3 major problems :
* ↑ global food P -> ↓ incomes
* Random supply chocs -> unstable farm prices (ex : weather conditions, diseases, …)
* Supermarket chains are + powerful than farmers -> ↓ farm prices and revenues.

27
Q

What does VAT mean?

A

Value Added Tax = standard form of indirect tax BUT significant differences between member states.

28
Q

What did the 1989 Social Charter imply?

A

Series of worker and social rights to be applied in member countries.
* Decent levels of income for employed and unemployed people
* Free movement of labour
* Freedom to belong to a trade union (= syndicat)
* Equal treatment of women and men

29
Q

What are the major benefits of the common market?

A
  • Trade creation
  • Reduction of direct cost of barriers
  • Countries can specialise + economies of scale
  • Greater competition
30
Q

Why is the European single market criticised?

A

FR Business Eng (8 decks)

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