Trade Blocs: Advantages and Disadvantages

A mindmap summarising the pros and cons of Trade Blocs.

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  • Created by: Tilly
  • Created on: 14-01-13 17:08
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  • Trade Blocs
    • Benefits
      • Greater Economic strength
      • Jobs created
      • Free trade within blocs
      • Protection of internal economy
      • Promotes internal trade
      • Access to all markets; creation of trade
      • Economies of Scale: Order in bulk = costs go down = more profit
    • Disadvantages
      • Distortion of Trade (alters amount of trade)
      • Loss of benefits to trade outside of bloc
      • Inefficiencies protected (if no competition, companies can afford to be inefficient)
    • Trade Blocs impose PROTECTIONIST POLICIES
      • Tariffs
        • extra money can be gained by home country
          • cheaper internal prices = more internal sales
      • Quotas
        • limit on import amounts over a certain time period

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