A group of countries acting as one in foreign relations. Trade barriers are heavily reduced or eliminated between member countries
Types of Trading Blocs
Free Trade Area > Customs Union > Common Market Each subsequent stage has less restrictions than the last
Free Trade Area
- No tariffs between member countries
- Each country has freedom to impose own tariffs with non-member countries
Examples
Customs Union
- No tariffs between member countries
- Member countries agree upon shared trade restrictions with non-member countries
Examples
Common Market
- No tariffs between member countries
- Member countries agree upon shared trade restrictions with non-member countries
- Free movement of capital and labour between member countries
- Centralized body to make decisions for all members