Trading Blocs & WTO Flashcards

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1
Q

What is a trading bloc?

A

Two or more countries coming together to manage and promote trade activities.

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2
Q

What is trade liberalisation?

A

Freeing of trade from protectionism measures ( less trade barriers)

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3
Q

What is trade creation?

A

Agreeing on deals for lower tariffs

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4
Q

What is the WTO?

A

World trade organisation- regulates international trade

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5
Q

What is a regional trade agreement ?

A

A treaty (formal agreement) that is signed by two or more countries to encourage free movement of goods and services

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6
Q

What is a bilateral agreement??

A

A trade agreement made between 2 parties (countries)

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7
Q

What are the 4 trading blocs?

A

Free trade area
Custom union
Common market
Monetary union

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8
Q

Free trade area? E.g.

A

Little to no Barriers in terms of tariffs and quotas e.g.NAFTA(North American free trade agreement)

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9
Q

Custom union?e.g.

A

One common system of procedures rules and tariffs for all or almost all of imports and exports e.g. EU

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10
Q

Common market? E.g.

A

Where most trade barriers have been removed with some common police’s of product regulation/ common external tariffs e.g. EU

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11
Q

Monetary union ?e.g.

A

Creating a single currency in trading bloc e.g. the eurozone

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12
Q

Difference between common market and custom unions?

A

Common market is an extension of a custom union where free movement of labour and capital is allowed.

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13
Q

Advantages of regional trade areas?

A

+market expansion
+greater consumer choice
+encourages eco growth
+ more jobs

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14
Q

Disadvantages of regional trade agreements?

A

-less domestic production/ spending
-loss of sovereignty (government authority)
-often favour member countries or some countries more than others
-exploitation of workers

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15
Q

What does the wto do to impact trade liberalisation?

A

-helps developing countries build their trade capacity
- discourage protectionism

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16
Q

What could the WTO and RTA conflict over?

A

RTA may want a common external tariff where as the WTO would discourage it to promote trade

17
Q

4 restrictions on trade?

A

Tariffs,
quotas,
subsidies to domestic producers,
Non tariff barriers.