Trading Blocs
IBO 2005-2012 Syllabus Requirements:
Trading blocs
• Free trade areas (FTAs)
• Customs unions
• Common markets
Higher level extension topics
• Trade creation and trade diversionObstacles to achieving integration
• reluctance to surrender political sovereignty
• reluctance to surrender economic sovereignty
Introduction to Trading Blocs
Episode 38: Trade Blocs by mjmfoodie
Perhaps a simpler introduction is here:
Trading Blocs by LanternaEducation
A more discursive explanation by student CuteChadz …
A2 Economics: Trade Blocs by CuteChadz
Trade Creation and Trade Diversion
Towards the end of the previous video, there was reference to trade creation and trade diversion, although the explanation was quite simple. You can get more depth out of these two effects of economic integration (the formation of trade blocs). The following two websites are recommended for reading up on these two topics:
http://tutor2u.net/economics/revision-notes/a2-macro-trade-agreements.html
http://www.revisionguru.co.uk/economics/creatdiver.htm
Obstacles to Achieving Integration
Finally, for brief but useful discussion of the obstacles to achieving integration, and summary of some of the above, visit this site:
http://centralecon.wikia.com/wiki/Economic_Integration
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