large free trade zone or near-free trade zone

Definition

formed by one or more tax, tariff and trade agreements Free Trade Areas Common Market

Types

Customs Union Economic Union

a. countries should specialize in producing goods in which a lower they have opportunity cost of production than other nations

That is, a comparative advantage By specializing in the production of these goods b. a group of nations as a whole can produce and consume a greater quantity of each product more specialized in the production of goods

Trade Blocks

As countries become

Need for Trade Blocks

c.

it becomes necessary to trade with countries that need these goods have resources unavailable in that nation

As nations become more specialized d. they also become increasingly dependent on their trading partners with fewer resources and land are generally less powerful than larger nations

Since smaller countries e. the need arises

to develop economic alliances to gain buying and selling power

f. Hence, trading blocs arise
Trade Blocks.mmap - 18/04/2009 - Carlos Mondragón