Trading Blocs and Exporter Difficulties (Vocabulary)

Vocabulary terms related to trading blocs and the difficulties exporters may face when trading internationally.

Trading blocs

Groups of countries in the same region that join to form a free trade area, reducing barriers among members.

Tariffs

Taxes on imported goods and services intended to raise prices and protect domestic industries.

Quotas

A limit on the quantity of goods that can enter a country.

Preferential Trade Area (PTA)

A regional agreement where members lower or abolish tariffs on imports from within the region.

Free Trade Area

A bloc where member countries reduce or abolish barriers on all goods from fellow members, while maintaining independent tariffs with non-members.

Customs Union

A bloc with no internal barriers between members and a common external tariff on imports from non-members.

Common Market

A trading bloc with free movement of goods, capital, labor, and services among members.

Removal of tariffs

Elimination of tariffs among bloc members, enabling tariff-free trade.

Common External Tariff

All member countries impose the same tariffs on imports from non-members.

Free movement of labour, capital and goods

Movement of people, money, and goods between member countries without barriers.

Economies of scale

Cost advantages from producing at larger volumes due to access to bigger markets.

Protectionism

Policy of shielding domestic industry from foreign competition through tariffs or quotas.

Language barriers

Language differences requiring translators and possible changes to labeling and advertising.

Distance

Greater shipping distances increase costs and risk of damage when trading internationally.

Differing consumer wants

Cultural or preference differences that require product adaptation and market research.

Documentation

Trade documents required for transactions; differences between countries can cause misunderstandings.

Currency exchange

Converting currencies with costs and fluctuating exchange rates that affect prices.

Methods of payment

Different payment methods across countries; cash is common but can be restricted in high-value trades.

Exporters’ difficulties

Common challenges faced by exporters such as language, distance, demand differences, documentation, currency, and payment issues.