4.1 - Trading Blocs + Integration

Question 1

What is a trading bloc?

Answer 1

Group of nations that join together within an agreement as to increase their collaborative trade + gain economic benefit

Question 2

Name each individual form of trade bloc

Answer 2

Independent Economy
Preferential Trade Area
Free Trade Area
Customs Union
Common Market
Monetary Union
Fiscal Union
Political Union

Question 3

What is the least integrated trade bloc?

Answer 3

Independent economy

Question 4

What is the most heavily integrated bloc?

Answer 4

Political Union

Question 5

Name 5 global trade blocs

Answer 5

NAFTA
ASEAN
EU
BRICS
AU
UNASUR
PIF
AU

Question 6

What are the main advantages for bloc members?

Answer 6

Free trade
Market access + trade creation
EoS
Jobs
Protection

Question 7

What are the main disadvantages for bloc members?

Answer 7

Loss of benefits from non-members
Distortion of trade
Inefficiencies + trade diversion

Question 8

What is trade creation?

Answer 8

Increased trade between bloc members following its formation
Barriers removed, specialisation, prices fall

Question 9

What is trade diversion?

Answer 9

Decrease in trade following bloc formation
Trade with low cost non-member states replaced