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Trade in the Contemporary World

Regional trading blocs and the European Union

  • 3 things to know
  • Component 02

Overview

Recall questions on trading blocs, free trade areas, customs unions, common markets and economic unions, the four freedoms of the European single market, trade creation and diversion, ASEAN, Mercosur and the USMCA that replaced NAFTA, the African Continental Free Trade Area, and low trade between African countries.

What you need to know

Answer each one before you reveal it.

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Key term

What is a regional trading bloc?

Key term

What feature does a customs union have that a free trade area does not?

Key term

Describe what a common market allows beyond a customs union.

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is a regional trading bloc?

    Model answer

    A regional trading bloc is a group of usually neighbouring countries that agree to reduce or remove trade barriers between themselves.

  2. 2

    Define a free trade area.

    Model answer

    A free trade area is a bloc whose members remove tariffs on trade between them while each keeps its own tariffs on goods arriving from outside.

  3. 3

    What feature does a customs union have that a free trade area does not?

    Model answer

    A customs union also applies a common external tariff, so every member charges the same duty on imports from outside the bloc.

  4. 4

    Describe what a common market allows beyond a customs union.

    Model answer

    A common market also allows the free movement of labour, capital and services between members, not just of goods.

  5. 5

    What is an economic union?

    Model answer

    An economic union is a common market whose members additionally coordinate economic policy and may share a single currency and central bank.

  6. 6

    Which four freedoms underpin the European Union's single market?

    Model answer

    The free movement of goods, services, capital and people between member states.

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AThe lower quartile is the 2nd value, 11 cm.
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