WTO lesson

In these trading blocs trade barriers are removed between member countries but each member can impose trade restrictions on non-members.

There is free trade between member countries combined with a common external tariff on goods from countries outside the customs union.

These are customs unions which adopt a common currency. The Eurozone is an example

These have the same characteristics as customs unions but include the free movement of factors of production (e.g. labour) between member countries.

In these trading blocs trade barriers are removed between member countries but each member can impose trade restrictions on non-members.

There is free trade between member countries combined with a common external tariff on goods from countries outside the customs union.

These have the same characteristics as customs unions but include the free movement of factors of production (e.g. labour) between member countries.

The characteristics of a common market but also require members to adopt common economic policies on matters such as agriculture, transport and industry. They often adopt a common currency. The Eurozone is an example.

These are customs unions which adopt a common currency. The Eurozone is an example.

In these trading blocs trade barriers are removed between member countries but each member can impose trade restrictions on non-members.

These include the free movement of factors of production (e.g. labour) between member countries.

There is free trade between member countries combined with a common external tariff on goods from countries outside the customs union.

Groups of countries that agree to reduce or eliminate trade barriers between themselves

Union that adopts a common currency

Measure of the the price of a country’s exports relative to its imports.

refers to the value of exports minus imports.

Increased trading volume inside the bloc

Decrease in FDI

Decrease in economic power

Trade diversion

Trade creation

Elimination of transaction costs

Distortion of comparative advantage

Increase in Foreign Direct Investment (FDI)