3.2B National governments

• trade bloc = A organisation which promotes free trade through non-tariff barriers and reduced quotas
• EU =

  • A single market trade bloc composed of 28 members and a population of 512 million.
  • It guarantees the free movement of goods, capital and people.
  • Has a single currency adopted by 19 members.
• ASEAN =

  A free trade area with 10 members with a population of 625 million

  • A uniform low tariff is applied between members for specified goods. It's working towards the elimination of tariffs sector by sector.
  • Agreed to create a single market by 2015, however this was not achieved.
• free market liberalisation =

  • This involves promoting free markets and reduces government intervention in the economy
  • Competition between firms leads to innovation and lowest cost production.
• Privatisation = the process of selling off public assets to private companies.

  Permitting foreign ownership allows an injection of foreign capital through FDI.
• Problems with trade blocs:

  1. Trade distortion
  2. Short-term unemployment
  3. Cultural erosion
  4. Sovereignty loss