Tradinng Blocs 4.1.5

Question 1

What is a trading bloc ?

Answer 1

trading blocs are partnerships and agreements between nations to allow free trade and the collaboration and integration of economic. political and cultural practices

Question 2

What is a economic union

Answer 2

Economic unions aim for intearation of economic, political and cultural factors. This also includes the adoption of a common currency such as the Euro

Question 3

Common markets

Answer 3

common markets
As well as free trade between members there is also tree movement of labour and capital

Question 4

Custom tariffs

Answer 4

Customs unions involve an agreed set of tariffs against non-members but free trade exists between members.

Question 5

NAFTA

Answer 5

(North American Free
Trade Agreement)
A tree trade zone including trade, investment, labour financial dealings
ana environmental legislation. Member countries negotiate separate deals with outside members

Question 6

ASEAN

Answer 6

ASEAN (Association of Southeast Asian
Nations) A free trade agreement between politically,
economically and culturally diverse countries

Question 7

EU

Answer 7

single market with free movement of people, goods and services. The EU also adopts common laws around employment and consumer legislation. Most member states are also part of the monetary union

Question 8

Benefits of trading blocs

Answer 8

• Opportunities to expand into new markets.
• Allows businesses to benefit from comparative advantage - cheaper and better quality products.
• Makes it easier to source labour if free movement is permitted.

Question 9

Drawbacks of trading blocs

Answer 9

• Countries and businesses outside the trading bloc may have a better comparative advantage which members are unable to access.
• Infant industries are vulnerable to large international competitors.
• Tensions with regions outside of the trading bloc.