Trade Blocs

Question 1

Trade bloc definition

Answer 1

Intergovernmental agreement, where barriers to trade are reduced

Question 2

Pros of trade blocs

Answer 2

Bigger market (no extra taxes)
National forms can merge to form trans national companies
Projection from foreign competitors and political stability

Question 3

Cons of trade blocs

Answer 3

Loss of sovereignty (governed by rules of trade bloc)
Interdependence (dependant on other countries)
Compromise and concession (got to accept free trade within the bloc which means local companies might go bust)