101 Concepts for the Level I Exam
Concept 34: Types of Trading Blocs and Regional Trading Agreements
- Free-Trade Area: All barriers to import and export of goods and services among member countries are removed. For e.g. North American Free Trade Agreement (NAFTA).
- Customs Union: Free-trade area + all member countries adopt a common set of trade restrictions with non-members.
- Common Market: Customs union + all barriers to the movement of labor and capital goods among member countries are removed.
- Economic Union: Common market + member countries establish common institutions and economic policy. For e.g. European Union (EU).
- Monetary Union: Economic union + member countries adopt a single currency. For e.g. European Zone.