Trade blocs

Question 1

Advantages of trade blocks are: (8 items)

Answer 1

• improve global peace and reduce conflict
• increase global trade and co-operation
• help reduce the development gap within a group
• allows trade groups to compete on a global level and have a bigger influence on wolrd affairs
• members can trade freely and be part of the free movement of people
• spread democracy and human rights
• reduce currency fluctuations with a single currency
• investment attraction

Question 2

negatives of trade blocks are: (4 items)

Answer 2

• some loss of sovereignty as decisions become centralised by what looks like detached, unelected bureaucracy
• some economic sectors are damaged from having to share resources, such as UK fishing industry sharing with France
• some poorer countries are rejected and cannot afford to trade with the block because of tariffs
• some loss of financial control

Question 3

in 2012, the EU was awarded the……………….

Answer 3

Nobel Peace Prize

Question 4

a preferential trade area (PTA) exists when countries close to each other agree to …………..

Answer 4

reduce or eliminate tariffs on selected goods

Question 5

a free trade area (FTA) exists when two or more countries……………………………………………………………..
an example is:

Answer 5

reduce or eliminate barriers to trade on all goods

example:North American Free Trade Agreement, NAFTA

Question 6

a customs union is

Answer 6

a removal of tariff barriers between members and the acceptance of a common eternal tariff against non-members.
members can still trade with non-members if the non-members pay the tariffs

Question 7

a common market is when member states trade freely in………………………………………………………
this also means some

Answer 7

all economic resources, tangible and intangible. this means the free movement of labour, capital, goods and services.
this also means some common policies such as the Common Agricultural Policy (CAP) and the Common Fisheries Policy (CFP) of the European Single Market (ESM)