4.1.5 trading blocs

• trade blocs

  an agreement between countries to reduce or eliminate trade barriers, such as tariffs and quotas, to promote trade among themselves
• main attraction of bein part of a trade bloc

  1. access to larger markets - access wider customer base
  2. economies of scale - larger markets allow businesses to produce on a biger scale, lowering average costs
  3. investment opportunities - encourage FDI due to reduced barriers and stability
  4. stronger political and economic ties
  5. in some blocs, people can move freely for work, increasing labour and transfer of skills