4.4 - Economic integration

Question 1

Define economic integration

Answer 1

Economic integration occurs when the economies of different countries move closer together regarding their trading relationships and economic policymaking.

Question 2

Define bilateral trade agreement

Answer 2

(Australia Japan 2015 econ partnership) Two countries increase volume of trade by removing protectionist stuff

Question 3

Define regional trade agreement

Answer 3

(Dominican republic-central america FTA; US and central american countries like el salvador) Two or more countries in a particular area

Question 4

Define multilateral trade agreement

Answer 4

Between three or more countries, trading block

Question 5

Trading blocs

Answer 5

• Free trade area (remove trade barriers; NAFTA)
• Customs union (free trade between members but common external tariff; south african sutoms union)
• Common market (free trade + free movement of labour+capital; east african community EAC)
• Monetary union (share central bank; EU)

Question 6

Strengths of trading blocs

Answer 6

• free trade
• closer economic ties
• greater access to workers and finance
• political coorporation and stability

Question 7

Weaknesses

Answer 7

• Time consuming and complex negotiations
• some businesses might die
• lose control over trade policy
• politically difficult; free movement of labour