What are trading blocs groups of countries aiming to reduce or eliminate?
Trade barriers
A free trade area removes tariffs and quotas between member countries but maintains independent trade policies with non-member countries. An example is NAFTA
A customs union adopts a common external tariff against non-member countries.
What additional feature does a common market have compared to a customs union?
Free movement of labor
An economic union combines all features of a common market with common economic policies and institutions
Match the type of trading bloc with its key characteristic:
Free Trade Area ↔️ Removes tariffs and quotas
Customs Union ↔️ Common external tariff
Common Market ↔️ Free movement of labor
Economic Union ↔️ Common economic policies
Arrange the types of trading blocs in order of increasing economic integration:
1️⃣ Free Trade Area
2️⃣ Customs Union
3️⃣ Common Market
4️⃣ Economic Union
What are two primary advantages of trading blocs for member countries?
Increased trade volume and improved economic efficiency
Trade diversion is a potential disadvantage of trading blocs for non-member countries.
The loss of some national sovereignty is a potential disadvantage of trading blocs.
What is an example of a trading bloc that has achieved significant economic integration but faced challenges related to unequal distribution of benefits?
The European Union
Arrange the following types of trading blocs in order of increasing complexity and integration:
1️⃣ Free Trade Area
2️⃣ Customs Union
3️⃣ Common Market
4️⃣ Economic Union
A common market allows the free movement of labor and capital within the bloc.
An economic union combines all features of a common market with common economic policies and institutions.
What is the defining characteristic of a Free Trade Area trading bloc?
Independent external policies
A Customs Union eliminates internal trade barriers and adopts a common external tariff
Which trading bloc type allows for the free movement of labor and capital?
Common Market
An Economic Union combines the features of a Common Market with common economic policies and institutions.
The types of trading blocs represent increasing levels of economic integration
What is one major advantage of trading blocs?
Increased trade volume
Trade diversion in trading blocs can lead to losses for non-member countries.
Steps in the dispute resolution process of the WTO
1️⃣ Consultations
2️⃣ Panel Review
3️⃣ Report
4️⃣ Appeal (if necessary)
5️⃣ Implementation
What principle ensures fair trade among WTO members?
Non-discrimination
The WTO facilitates negotiations for new trade agreements
What is the primary geographic focus of the WTO compared to trading blocs?
Global
Match the aspect of trade with the correct organization:
Global scope ↔️ WTO
Regional focus ↔️ Trading Blocs
What is the first stage in the WTO's dispute resolution process?
Consultations
Parties can appeal the WTO panel's decision to the Appellate Body.
If the losing party fails to implement the WTO's recommendations, they may face trade sanctions
What is the primary goal of a trading bloc?
Reduce trade barriers
A Free Trade Area allows each member to maintain independent external trade policies.
Match the type of trading bloc with its key characteristic:
Free Trade Area ↔️ Independent external policies
Customs Union ↔️ Common external tariff
What is one disadvantage of trading blocs?
Loss of national sovereignty
The WTO's trade rules are based on principles like non-discrimination and transparency.
The WTO provides a mechanism for resolving trade disputes
What is the WTO's primary goal?
Liberalize international trade
Stages in the WTO's dispute settlement process
1️⃣ Consultations
2️⃣ Panel Review
3️⃣ Appeal (if necessary)
4️⃣ Implementation
The WTO's effectiveness can be limited by the complexity of negotiations and enforcement.
Trading blocs promote regional integration, while the WTO aims to liberalize global trade.