Nguyen Hoang Minh – 10I1
b)
i) - Preferential trade areas give preferential access to certain
products from the participating countries.
- Preferential trade areas do not remove tariffs completely.
ii)
- Free trade areas maintain no protectionist barriers to
international trade.
- Free trade areas promote the international division of labour,
as well as an increase in access to lower cost foreign products.
iii)
- Customs unions are trade blocs where there is free trade
between member countries and an external tariff on nonmember’s imports.
- The countries share the tariff revenues and co-ordinate some
trading policies.
iv)
- Common markets are similar to customs unions, in that they
remove barriers regarding imports and/or exports
- Common markets differ from customs unions in that the
factors of production (labour, capital) can move freely within
member countries.
v)
- Economic unions are trade blocs where there is free trade
between countries, a common external tariff and some common
policies, which may include a common currency (e.g. Euro).
- Economic unions not only remove restrictions on goods and
services, but also on labour and capital.
vi)
- In a monetary union, all countries use the same currency.
- Monetary unions can be a feature of any of the types of trading
bloc mentioned above.