Warm - up One of the arguments in support of protective tariffs is that they save domestic jobs. Demonstrate this on a graph. Who are the stake holders when examining free trade issues? Explain your graph to your study buddy, what is your general opinion about free trade vs protectionism?

Economic Integration aka Trade Blocs NAFTA is which type of trade block? - NPR Segment IB Economics 3.4

Preferential Trade Agreements an overview Give preferential access to certain products from certain countries by reducing or eliminating tariffs or by other trade agreements Bilateral Trade agreements- Multilateral trade agreements- Example: WTO and Most Favored Nation

Four Types of Trading Blocs Free Trade Areas Customs Unions Common Market Economic Union

First, assume sovereign states:

Free Trade Area Definition Specifics Pros and cons:

Customs Union Definition: Specifics: Pros and cons:

Common Market Definition: Specifics: Pros and cons: Variations: A monetary union is a common market with a common currency and a common central bank. Think Eurozone – more on this later

Economic Union Definition: Specifics: Example:

Impact of Trading Blocs Economic integration will increase competition among producers within the trading bloc. Facilitate the free movement of goods and services within the bloc It may increase competition between different trading blocks.

Examples of Trading Blocks Eurozone in the EU – A monetary Union (type of common market) Pros: Cons: Eurozone - A monetary union not a fiscal union on NPR clip explaining greek debt crisis NAFTA ASEAN CAFTA APEC