WTO and Trade integration

Question 1

What is the WTO and what purpose do they serve

Answer 1

World Trade Organisation - they solve trade disputes

Question 2

What are the 5 types of integration levels

Answer 2

Monetary union
Single (common) market
Customs union
Free trade area
Preferential trade agreement

Question 3

What is a monetary union

Answer 3

Where members share a currency and monetary policy

Question 4

What is a single market

Answer 4

All barriers to factor mobility are removed

Question 5

What is a customs union

Answer 5

Free trade and common external tariff

Question 6

What is a free trade area

Answer 6

Where countries agree to zero import tariffs and no non-tariff barriers

Question 7

What is a preferential trading area

Answer 7

Agreements of trade with less developed countries that involve lower barriers to trade

Question 8

What are the effects of free trade

Answer 8

• Fall in price for consumers
• Export opportunities
• Increased competition

Question 9

What are some reasons to join a single market

Answer 9

• No import tariffs
• Greater flows of investment
• Greater competition

Question 10

What are some reasons to join a monetary union

Answer 10

• Reduced currency risk
• Cross-border trade
• More tourism
• Price transparency and competition