Regional Trading Blocs

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  • Regional Trading Blocs
    • Trading Blocs - A group of countries trade freely with each other. However, countries inside the trading bloc may raise trade barriers against those countries outside of the trading bloc.
      • Trade Barrier Examples:
        • Tariffs
          • Tax on Imports
          • Shift Supply Curve left
        • Quotas
          • limit of the amount that a country can export
    • Impact of Regional Trade Blocs on trade
      • Trade Diversion
        • Occurs when you trade away fro your original partners
      • Trade Creation
        • Creation of new trading Relationships.
    • Benefits
      • Trade Creation
        • Newer trading Relationships.
      • Economies of Scale
        • Bigger Market - More Production
      • Comparative Advantage
      • Competition
        • More Competition - Lower Price
      • Similar stages of Development
        • EU Countries have common interests.
      • Diversity of Industries
      • More Power Negotiating Positions


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