Trading blocs - chapter 70 (key terms)

Common market

A market where goods, labour and capital can move freely across the member states; tariffs are generally removed and non-tariff barriers eliminated, or at least reduced

Customs union

A union where member states remove all trade barriers between themselves and members adopt a common set of barriers against non-members

Economic and monetary union

An economic union that uses a common currency

Economic union

A type of trade bloc involving both a customs union and a common market

Free trade area (FTA)

A region where member states remove all trade barriers between themselves, but each member state nevertheless keeps different barriers against non-member states

Preferential trading area (PTA)

A type of trading block where certain types of products from participating countries receive a reduced tariff rate

Regional trade agreement (RTA)

Agreement made between two or more countries within a geographical region, which is designed to facilitate trade by bringing down barriers

Rules of origin

A system of allocating certificates whereby a defined amount of a product or service must be certified as being created within that region

Single market

A market where almost all trade barriers between members have been removed and common laws or policies aim to make the movement of goods and services, labour and capital between countries as easy as the movement within each country

Trading bloc

A group of countries that has signed a regional trade agreement to reduce or eliminate tariffs, quotas and other protectionist barriers between themselves