geb - ch. 9
Andean Community
a 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union
treaty of lisbon
a European Union-sanctioned treaty that will allow the European Parliament to become the co-equal legislator for almost all European laws
political union
a central political apparatus coordinates economic, social, and foreign policy
European free trade association (efta)
a free trade association including norway, iceland, and switzerland
customs union
a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy
common market
a group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other and (2) the pursuit of a common external trade policy
economic union
a group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other, (2) the adoption of a common currency, (3) the harmonization of tax rates, and (4) the pursuit of a common external trade policy
free trade area
a group of countries committed to removing all barriers to the free flow of goods and services between each other, but pursuing independent external trade policies
Central American Common Market
a trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, which began in the early 1960s but collapsed in 1969 due to war
regional economic integration
agreements among countries in a geographic region to reduce and ultimately remove tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other
CARICOM
an association of English-speaking Caribbean states that are attempting to establish a customs union
european union
an economic and political union of 28 countries (2014) that are located in Europe
national sovereignty
concerns over _______ often slow or stop integration attempts
european parliament
elected EU body that provides consultation on issues proposed by european commission
Association of Southeast Asian Nations (ASEAN)
formed in 1967, an attempt to establish a free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Vietnam, and Thailand
North American Free Trade Agreement (NAFTA)
free trade area among Canada, Mexico, and the US
establishment of a common currency and the harmonization of tax rates
how is an economic union even more closely integrated than free trade areas, customs unions, and common markets?
17
how many EU members now use the euro?
free trade area, customs union, common market, economic union, full political union
in order of increasing integration, what are the levels of economic integration?
Mercosur
pact among argentina, Brazil, Paraguay, and Uruguay to establish a free trade area
optimal currency area
region in which similarities in economic activity make a single currency and exchange rate feasible instruments of macroeconomic policy
european commission
responsible for proposing EU legislation, implementing it, and monitoring compliance
court of justice
supreme appeals court for EU law
treaty of rome
the 1957 treaty that established the european community
restrict mergers and acquisitions that it believes will reduce competition
the European Commission is taking an activist stance with regard to the competition policy, intervening to...
Single European Act
the _______ sought to create a true single market by abolishing administrative barriers to the free flow of trade and investment among EU countries
Central America Free Trade Agreement (CAFTA)
the agreement of the member-states of the Central American Common Market joined by the Dominican Republic to trade freely with the US
many markets that were formerly protected from foreign competition are now more open
the creation of single markets in the EU and North America means that...
reduced exchange costs, reduced risk associated with currency fluctuations, and increased price competition
the economic gains from a common currency come from...
the mix of factor costs and skills is optimal
the free movement of goods across borders, the harmonization of product standards, and the simplification of tax regimes make it possible for firms based in a free trade area to realize potentially enormous cost economies by centralizing production in those locations where...
european council
the heads of state of EU members and the president of the european commission
increased price competition
the lowering of barriers to trade and investment among countries within a trade group will probably be followed by:
Caribbean Single Market and Economy (CSME)
the six CARICOM members that agreed to lower trade barriers and harmonize macroeconomic and monetary policies
trade creation
trade created due to regional economic integration; occurs when high-cost domestic producers are replaced by low-cost foreign producers within a free trade area
trade diversion
trade diverted due to regional economic integration; occurs when low-cost foreign suppliers outside a free trade area are replaced by higher-cost suppliers within a free trade area
Maastricht Treaty
treaty agreed to in 1992, but not ratified until January 1, 1994, that committed the 12 member states of the european community to a closer economic and political union
a common market also allows factors of production to move freely among countries
what is the difference between a customs union and a common market?
in a free trade area, barriers to trade among member countries are removed, but each country determines its own external trade policy. In a customs union, barriers to trade among member countries are removed, and a common external trade policy is adopted.
what is the main difference between a free trade area and a customs union?