MacroEconomics 32.4 International Trade Organizations
The World Trade Organization (WTO), which as of 2015 had 159 member nations, handles trade disputes among its member nations.
True
Which of the following is not a regional trading bloc?
WTO
A regional trade bloc prevents nations from trading with other nations within their geographic area. The shifting of trade from countries outside a regional trade bloc to nations within a bloc is known as
A regional trade bloc prevents nations from trading with other nations within their geographic area. trade diversion
Critics of the North American Free Trade Agreement (NAFTA) suggest that much of the increase in exports from Mexico to the United States now involves goods that Mexico otherwise would have exported to other nations. Mexican firms choose to export the goods to the United States, the critics argue, solely because the items receive preferential treatment under NAFTA tariff rules. This can be described as
a diversion of trade.
A significant advantage to being a member of a trade bloc is
reduced or eliminated tariffs among member countries.
The main international institution created in 1947 to improve trade among nations was
the General Agreement on Tariffs and Trade.
The multilateral trade agreements established for all nations through the World Trade Organization could help
to prevent both trade diversion and trade deflection that can occur under regional trade agreements, and promote more overall international trade, by adopting global trade agreements.
The North American Free Trade Agreement and the European Union are examples of
trade blocs.