Trading Blocs 4.1.5

Question 1

What is a trading bloc?

Answer 1

A group of countries that form an agreement to reduce or eliminate protectionist measures between each other

Question 2

EU

Answer 2

The European Union is a trade bloc between 28 countries in Europe. It allows free movement of goods and people between members.

Question 3

ASEAN

Answer 3

The Association of Southeast Asian Nations allows are flow of goods in the region.

Question 4

NAFTA

Answer 4

Trading bloc between Canada, Mexico and USA were trade barriers are reduced between members

Question 5

Benefits of trading blocs

Answer 5

• access to more markets - increase sales volume and therefore lower costs due to EoS
• easier to obtain materials and labour within bloc
• more efficient due to greater competition - reduce costs to lower prices

Question 6

Disadvantage of trading bloc

Answer 6

• increased competition which may be more of an issue for small businesses
• common rules and regulations to comply with
• more expensive to import from countries outside of bloc