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AS Geography lesson on the development of Trade Blocs using contemporary examples and assessing the advantages and disadvantages of each
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“Some day, following the
example of the United States
of America, there will be a
United States of Europe.”
- George Washington, 1732 – 1799, 1st President of the United States of America
Learning Objective
Explain the stages of integration in trade blocs and what advantages and
disadvantages they bring
By the end of this lesson I will be able to…
Trade Bloc Progress Diagram
(Starting with not being in a trade bloc)
Preferential Trade Area
Trade Bloc Progress Diagram
Preferential Trade Area
FreeTrade Area
Trade Bloc Progress Diagram
Preferential Trade Area
CustomsUnion
FreeTrade Area
Trade Bloc Progress Diagram
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
Trade Bloc Progress Diagram
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
EconomicUnion
Trade Bloc Progress Diagram
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Trade Bloc Progress Diagram
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Why hasn’t the African
Union progressed to a
free trade area?
Reduces the trade barriers between countries, but doesn’t remove them completely
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Why hasn’t the African
Union progressed to a
free trade area?
Why might higher
income countries be the
ones which benefit more
from preferential trade
areas?
Reduces the trade barriers between countries, but doesn’t remove them completely
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Why hasn’t the African
Union progressed to a
free trade area?
Why might higher
income countries be the
ones which benefit more
from preferential trade
areas?
Why would TNCs
prefer free trade areas
more than preferential
trade areas?
Reduces the trade barriers between countries, but doesn’t remove them completely
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Removes the trade barriers between countries
What do we
already know
about NAFTA?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Removes the trade barriers between countries
What do we
already know
about NAFTA?
Why do critics
claim NAFTA
benefits the USA
the most?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Removes the trade barriers between countries
What do we
already know
about NAFTA?
Why do critics
claim NAFTA
benefits the USA
the most?
Is outsourcing possible within a preferential trade area?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Customs Unions remove internal trade barriers and have a shared tariff on importing goods
from outside the trade bloc
Does having a shared tariff
on importing stop members
from competing directly
with each other?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Customs Unions remove internal trade barriers and have a shared tariff on importing goods
from outside the trade bloc
Does having a shared tariff
on importing stop members
from competing directly
with each other?Is it still possible to
outsource once you’re in a customs union?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
A common market acts as a free trade area that allows the free movement of labour internally,
but doesn’t need to have shared external tariffs
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
A common market acts as a free trade area that allows the free movement of labour internally,
but doesn’t need to have shared external tariffs
Founded in 1951 the
European Coal and Steel
Community was the world’s
first common market
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
A common market acts as a free trade area that allows the free movement of labour internally,
but doesn’t need to have shared external tariffs
Founded in 1951 the
European Coal and Steel
Community was the world’s
first common market
Why is it doubtful that NAFTA will ever develop
to be a common market?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
A common market acts as a free trade area that allows the free movement of labour internally,
but doesn’t need to have shared external tariffs
Founded in 1951 the
European Coal and Steel
Community was the world’s
first common market
Why is it doubtful that NAFTA will ever develop
to be a common market?
What was the advantage of
being allowed to move skilled
coal miners between members?
“We hope to see a Europe where men
of every country will think as much of
being a European as of belonging to
their native land, and that without
losing any of their love and loyalty of
their birthplace.”
- Winston Churchill, Former British Prime Minister, 1948
1951 saw the Schuman Declaration
unite Europe’s coal and steel industries
(the foundations of modern warfare)
setting Europe on a course to greater
unity and a lasting peace
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Economic Unions combine both customs unions and common markets, allowing the free movement
of labour and having shared tariffs on imports
What did the Treaty of Rome
do to the European Coal and
Steel Community in 1958 to
form an economic union?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Economic Unions combine both customs unions and common markets, allowing the free movement
of labour and having shared tariffs on imports
What did the Treaty of Rome
do to the European Coal and
Steel Community in 1958 to
form an economic union?
Why is the EU unlikely to
restrict the free movement of
labour between member states?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
Economic Unions combine both customs unions and common markets, allowing the free movement
of labour and having shared tariffs on imports
What did the Treaty of Rome
do to the European Coal and
Steel Community in 1958 to
form an economic union?
Why is the East African Community trying to become
an economic union?
Why is the EU unlikely to
restrict the free movement of
labour between member states?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
The 50 united states of America represent the only group that’s progress to full integration, sharing a
single government, president and economic policy.
Do we think of the USA as a
single country of as 50
united states operating
together for mutual benefit?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
The 50 united states of America represent the only group that’s progress to full integration, sharing a
single government, president and economic policy.
Do we think of the USA as a
single country of as 50
united states operating
together for mutual benefit?
Do Americans see themselves
as a single country or as 50
united states working together?
Preferential Trade Area
CustomsUnion
FreeTrade Area
CommonMarket
FullIntegration
EconomicUnion
The 50 united states of America represent the only group that’s progress to full integration, sharing a
single government, president and economic policy.
Do we think of the USA as a
single country of as 50
united states operating
together for mutual benefit?
Does Europe have a president?
Do Americans see themselves
as a single country or as 50
united states working together?
Why be in a trade bloc?Some Advantages and Disadvantages
Foreign Direct Investment
Larger markets are created attracting
further investment by TNCs as the cost of
production is low in that area
Economies of ScaleThe cost of production is reduced because mass production is possible
CompetitionCompanies become
more efficient to
remain competitive
InterdependenceIssues such as natural
disasters in one country can affect all trade bloc members
ConcessionsJoining a trade bloc involves agreeing to do things that will benefit the bloc as a whole, but which might disadvantage some members
Loss of Sovereignty
As trade blocs become more
integrated, more decision are
made at a federal level, and
members can feel they’ve lost the
ability to make their own decisions
RegionalismTo reduce costs and maximise profits, some areas lose out and unemployment increases
Research TasksInvestigate whether Europe has a president
Find out who’s in the East African
Community, how their trade bloc operates at
the moment, and what their timeline is for
becoming the East African Federation
Read up on any of the advantages and
disadvantages of trade blocs that you’re
completely secure in
Explain the stages of integration in
trade blocs and what advantages
and disadvantages they bring
Can you
?