Trading Blocs & WTO Flashcards
What is a trading bloc?
Two or more countries coming together to manage and promote trade activities.
What is trade liberalisation?
Freeing of trade from protectionism measures ( less trade barriers)
What is trade creation?
Agreeing on deals for lower tariffs
What is the WTO?
World trade organisation- regulates international trade
What is a regional trade agreement ?
A treaty (formal agreement) that is signed by two or more countries to encourage free movement of goods and services
What is a bilateral agreement??
A trade agreement made between 2 parties (countries)
What are the 4 trading blocs?
Free trade area
Custom union
Common market
Monetary union
Free trade area? E.g.
Little to no Barriers in terms of tariffs and quotas e.g.NAFTA(North American free trade agreement)
Custom union?e.g.
One common system of procedures rules and tariffs for all or almost all of imports and exports e.g. EU
Common market? E.g.
Where most trade barriers have been removed with some common police’s of product regulation/ common external tariffs e.g. EU
Monetary union ?e.g.
Creating a single currency in trading bloc e.g. the eurozone
Difference between common market and custom unions?
Common market is an extension of a custom union where free movement of labour and capital is allowed.
Advantages of regional trade areas?
+market expansion
+greater consumer choice
+encourages eco growth
+ more jobs
Disadvantages of regional trade agreements?
-less domestic production/ spending
-loss of sovereignty (government authority)
-often favour member countries or some countries more than others
-exploitation of workers
What does the wto do to impact trade liberalisation?
-helps developing countries build their trade capacity
- discourage protectionism
