trading blocs

Question 1

what is a trading bloc

Answer 1

group of countries where barrier to trade are reduced or eliminated between member countries

Question 2

what is a free trade area

Answer 2

group of countries that trade freely with no trade barriers

Question 3

what are the benefits to free trade

Answer 3

access to member country markets without restrictions means export level increase
no tariff on import from bloc members and lower prices benefit businesses and consumers
possibility of EOS
can spread a

Question 4

what are the disadvantages to trading blocs

Answer 4

no protection for domestic producers
reaching agreements is a slow process
a common external market can increase costs of raw materials
harmonised regulations may not suit all businesses

Question 5

what is the impact of trading blocs

Answer 5

business that export will benefit
business can compete with other producers
all businesses have an incentive to adapt by upgrading their products and increase investment