Trading BLocks
- Created by: markalex
- Created on: 13-01-15 10:49
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- World Trade and Trading Blocks
- Why has trade increased?
- Better transport and communications
- More efficient transport systems means that goods can be shipped more quickly and cheaply
- Relaxing of trade barriers
- Since the 1930s countries have realised that protectionism does not help economic growth
- Development of multinationals
- A lot of world trade has been driven by large multinationals
- Their aim is to increase sails around the world and produce Goods in locations which minimises their costs
- Travel and Consumer awarness
- Due to an increase in ravel, consumers are more prepared to buy goods from other countries
- They welcome greater choice and recognise that imports can satisfy a growing number of needs and wants
- Better transport and communications
- Advantages
- Belonging to a Trading Block brings much the same benefits as those which result from free trade anywhere
- If members of the Block abolish all trade barriers, goods will be cheaper
- It is argued that the formation of trading blocs invites foreign direct investment .
- This may be because Foreign firms are keen to locate operations within a trading block to get access to a larger - barrier free market
- The formation of a Trading Block should result in closer cooperation between members.
- For example
- Countries may share resources, help each other out and introduce common standards, laws and customs
- For example
- Disadvatntages
- Members
- Those in favour of worldwide free trade generally oppose trading blocs
- By their nature trading blocs encourage regional as opposed to global free trade.
- One problem with belonging to a trade bloc is the financial cost to the government and therefore the tax payer
- Non- members
- Countries that do not belong to trading blocs will face common trade barriers when selling goods to other any other member inside the Block
- They will obviously be at a disadvantage and may be forced to find a new market
- Members
- What is a Trading Block
- These are groups of countries situated in the same region that join together and make a free trade area
- Examples of Trading Blocks
- The EU
- (European Union)
- This is made up of 27 European countries
- (European Union)
- NAFTA
- (North American Free Trade)
- MAde up of three countries The USA, Canada and Mexico
- (North American Free Trade)
- CARICOM
- (The Carribean Community)
- This is made up of 15 members in and around the Carribean
- (The Carribean Community)
- The EU
- Why has trade increased?
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