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Chapter 2: The development of world trading groups - Coggle Diagram
Chapter 2: The development of world trading groups
Trading blocs features
Customs union
A customs union is generally defined as a type of trade bloc which is composed of a free trade area with a common external tariff.
Common market
Similar to customs union, but allows free flow of capital and labour across borders
Economic union
Harmonisation of economic policy
Members are expected to follow common fiscal and monetary policies
Political union
Includes the characteristics of economic union
but, also requires political harmony among the members
The EU
European monetary union
The eurozone
Single european currency; the euro
No need for exchanging currencies for international transactions between EU countries
There are countries that don't use the euro
Companies that operate in the EU must adapt to EU currency
Strategic implecations
Easy movement through EU borders
Strong infrastructre
Ease of exportation between EU countries
Big source of suppliers
Wider specialisms. Each European country has a comparative advantage in different areas that can be exploited