involves different countries coordinating and linking their economic policies, for example   trade agreements between two nations or at the other end of the scale, a     such as the EU.

bilateral  integration  union  Union  Fiscal  Economic  multilateral  Monetary 

Preferential Trading Agreements offer preferential (i.e.   tariff barriers) between participating nations, but not    trade between members. Examples of this include the EU / African Caribbean trade agreement or ACP (Pacific Group of States).

higher  lower  free  barriers 

     are a more comprehensive arrangement than preferential trading agreements because they provide tariff free trade between members.  Examples include   (North America free trade area).

  Areas  Free  tariff  EEA  NAFTA  Trade 

  is an agreement between member countries to ensure free trade within those countries but also barriers.

 Customs  common  Internal  Monetary  external  union 

A    is a customs union plus, consisting of common standards on goods and services and the free movement of .

 market  common  fiscal  monetary  current  capital 

  involves a common currency, such as the Euro as well as universal     .

Economic  policy  fiscal  monetary  Union  Financial 

A      consists of a larger and consolidated group of nations or states, that share a joint government that is internationally acknowledged e.g. UK, UAE.

 market  common  union  monetary  political  customs

  are reached between two nations or trading groups that gives each party favoured trade status.

trade  Bilateral  Multilateral  agreements 

    are agreed between a number nations or trading groups and give each party favoured trade trade status.

Trade  Bilateral  Multilateral  agreements 

One disadvantage of a     is that negotiating separate third party deals is not allowed and membership also compels individual nations to abide by common rules agreed by the other   .

  members  common  union  monetary  political  customs 

Trade creation occurs when entry to a customs union means that the production of a good or service switches from a     producer to a       one.

cost  cost  opportunity  high  lower 

   occurs when the production of a good or service diverts from a low cost producer to a higher cost one.

diversion  Trade  creation  Growth 

The difference between a Free Trade Area (FTA) and a      is that the latter includes       .  This brings about benefits through increased economies of scale and increased competition in the market.

political  fiscal  customs  monetary  union  common  barriers  internal  external 

Joining a Customs Union such as the EU provides advantages from increased trade (    ) but can also provide disadvantages in the form of      , when trade is diverted from     producers to     ones.

  trade  cost  cost  trade  high  low  growth  creation  diversion 

The four roles of the    include acting as forum so that participating nations can meet and agree ways that       can be reduced, ensuring that the complex trade rules developed by the WTO's members are respected, reviewing the      of its members to assess whether WTO members are abiding by WTO rules and acting as a   and jury in cases where countries are perceived to have   free trade rules.

  trade  quota  policies  trade WTO  judge  tariff  broken  barriers