class 7

Question 1

schrijf de balassa stages op

Question 2

Are tariffs barriers to services, labour and capital?

Answer 2

no, only to goods

Question 3

If there are no tariffs, is trade fully free?

Answer 3

No, non-tariff barriers (rules, standards, bureaucracy) can still restrict trade.

Question 4

What is a trade agreement?

Answer 4

An agreement that REDUCES tariffs and quotas.

Question 5

What is a Free Trade Area (FTA)?

Answer 5

An agreement that REMOVES at least 90% of tariffs and quotas between members.

Question 6

Which one is deeper integration: FTA or trade agreement?

Answer 6

FTA.

Question 7

Whats the difference between an FTA and trade agreement

Answer 7

a trade agreement reduces barriers while an FTA barriers to trade removes.

Question 8

What can we sat about the EU and the first balassa stages

Answer 8

it was never an FTA because it had from the beginning (1951 ECSC) already COMMON POLICIES (like tariffs and trade).

Question 9

The EU is an economic monetary union explain

Answer 9

it has a common market together with one monetary policy (euro) but national fiscal policies.

Question 10

How many
1. FTA’s
2. Custom unions
3. common market
4. economic union

Answer 10

1. FTA’s: 300
2. Custom unions: 10/15
3. common market: 2/3
4. economic union: 1 (EU)

Question 11

Do all EU countries participate in EMU?

Answer 11

No, only part of them (eurozone).

Question 12

What is the single market?

Answer 12

common market + no internal custom controls (that is what makes us comparable to the US, Russia or China, usually only states have that)

Question 13

Why does NAFTA/USMCA have few institutions? (US, Mexico, Canada)

Answer 13

Because it aims for maximum freedom and competition with minimal central control.

Question 14

Can countries skip stages of economic integration?

Answer 14

No, integration is a gradual process where each stage builds on the previous one.

Question 15

Why can’t you go directly from FTA to Economic Union?

Answer 15

Why can’t you go directly from FTA to Economic Union?

Question 16

Why was the single market necessary after the common market?

Answer 16

To prevent fragmentation caused by different national rules.

Question 17

What does “fragmentation” mean in this context?

Answer 17

It harmonises rules and removes internal barriers.

Question 18

Why can a common market fragment easily?

Answer 18

Because a common market is fragmentable: it can reintroduce different rules and barriers.

Question 19

Can you avoid tariffs by exporting through another country in an FTA?

Answer 19

no because custom controls looks at rules of origin

Question 20

Why do rules of origin exist?

Answer 20

To prevent countries from bypassing tariffs through third countries (spain, Mexico, US example).

Question 21

How can firms try to benefit from FTAs?

Answer 21

By producing or assembling goods in a member country.

Question 22

Why is an FTA not full free trade?

Answer 22

Because customs controls and rules of origin still exist.

Question 23

Because customs controls and rules of origin still exist (40% is made in Mexico, the rest in Spain)

Answer 23

The product does not qualify and tariffs apply.

Question 24

What are barriers “on the border”?

Answer 24

• Tariffs, quotas, customs controls
• relatively easy to remove/change
• makes it more difficult for FOREIGNERS

Question 25

What are barriers “behind the border”?

Answer 25

- monetary - fiscal (VAT) - regulatory (very hard) - culture - you can never totally remove them - protect consumers

Question 26

True or False: Balassa fully includes behind-the-border barriers in his model.

Answer 26

False. He mainly focuses on on-the-border barriers like tariffs and quotas.

Question 27

False. He mainly focuses on on-the-border barriers like tariffs and quotas.

Answer 27

Because his model focuses on early stages of integration, where tariffs and quotas are central.

Question 28

In which stage do behind-the-border barriers become important?

Answer 28

In deeper integration stages like the EU single market.

Question 29

Why are behind-the-border barriers harder to remove?

Answer 29

Because they are embedded in national laws, systems and culture.

Question 30

Are customs controls on-the-border or behind-the-border barriers?

Answer 30

On-the-border.

Question 31

Can all barriers be removed?

Answer 31

No, especially behind-the-border barriers cannot be fully removed.

Question 32

Why do differences between countries create trade costs?

Answer 32

Because firms must adapt to different rules, cultures and systems.

Question 33

Why are customs controls still needed without tariffs?

Answer 33

To check origin, fiscal rules (VAT), and regulatory compliance.

Question 34

What is removed in a single market that is not removed in a common market?

Answer 34

Customs controls.

Question 35

Why is disintegration (like Brexit) difficult?

Answer 35

Because economies are deeply interconnected through value chains.

Question 36

Has the EU completely removed fiscal barriers?

Answer 36

No, but it has harmonised them (e.g. VAT).

Question 37

Can regulatory barriers be fully removed?

Answer 37

No, because they are linked to national systems and culture.

Question 38

How does the EU deal with regulatory barriers?

Answer 38

Through harmonisation and mutual recognition.

Question 38

there are 4 modes

Answer 38

Mode 1: crossborder service without movement (online) Mode 2: consumer travels abroad (tourism) Mode 3: company establishes abroad Mode 4: provider travels temporarily

Question 39

What are transnational services?

Answer 39

services provided across the border

Question 40

What are access barriers?

Answer 40

Barriers that restrict entry into a market (similar to on-the-border barriers).

Question 41

Is a work visa an on-the-border or behind-the-border barrier?

Answer 41

on the border