Text B, Paragraph 9
Overall, Cambodia is hoping that the CCFTA will increase net exports, attract investments, and create employment opportunities. However, many in developed Western economies fear that China may insist on Cambodia moving away from trade links with other large economies and instead continue deepening economic integration with China.
Define the term economic integration indicated in bold (Text B, Paragraph 9).
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Text D, Paragraph 1
During recent trade discussions, several South American countries have expressed interest in forming a customs union. This proposal is being examined as a way to improve economic cooperation between member states.
Define the term customs union as indicated in bold (Text D, Paragraph 1).
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Text E, Paragraph 1
Ongoing talks in Europe are focused on the development of a common market among new and existing countries in the EU. These talks aim to strengthen economic ties and address challenges in cross-border trade and investment.
Define the term common market as indicated in bold (Text E, Paragraph 1).
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Text D, Paragraph 2
There are growing concerns about the effects of new regional agreements on trade diversion. The impact of these agreements on existing trade patterns is still being evaluated by economic analysts.
Define the term trade diversion as indicated in bold (Text D, Paragraph 2).
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Text A, Paragraph 3
A recent study has highlighted the potential benefits of a monetary union for several East African countries. Ongoing research is expected to provide more insights into the economic impacts of such an arrangement.
State two advantages of monetary union as found in bold (Text A, Paragraph 3).
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Text C, Paragraph 3
Trade volume in Vietnam has increased by 15% since the formation of a regional economic agreement. Further assessments are underway to understand the long-term benefits of these new arrangements.
Calculate the new trade volume if trade was $200 billion annually before the regional economic agreement indicated in (Text C, Paragraph 3).
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Text E, Paragraph 3
Critics of regional trade blocs argue that they can sometimes create more issues than they solve. Discussions about the long-term effects of such agreements continue across different industries and countries.
State two disadvantages of trade blocs as found in (Text E, Paragraph 3).
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Extract B, Paragraph 3
The East African Community (EAC) has evolved from a preferential trade arrangement to a comprehensive regional trade agreement. Initially offering reduced tariffs on select goods, it now encompasses broader economic cooperation among seven member states. Meanwhile, Kenya maintains separate preferential arrangements with the EU for coffee exports.
Explain the difference between preferential trade agreements and regional trade agreements using the EAC example.
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Extract A, Paragraph 3
Armenia's trade integration has deepened since signing agreements with both the EU and Russia. The EU agreement provides preferential market access for Armenian goods, while Russian integration involves shared regulatory standards. Economic analysts note how these agreements affect different sectors of Armenia's economy.
Explain two ways in which these trade agreements affect Armenian industries.
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Extract B, Paragraph 2
The USMCA (United States-Mexico-Canada Agreement) allows tariff-free trade between members, but each country maintains different trade policies with external partners. Mexico has free trade with Cuba, Canada imposes tariffs, and the US maintains a trade embargo. This flexibility allows members to pursue independent external trade relationships while benefiting from internal free trade.
Explain the difference between a free trade area and a customs union using the USMCA example.
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Extract A, Paragraph 2
The European Union's evolution has seen the addition of free movement of labour, capital, and services beyond simple goods trade. Croatian workers can now seek employment across the EU, while Polish companies can establish operations in France without restriction. However, some newer EU members haven't adopted the euro, maintaining their own currencies.
Explain the difference between a common market and a monetary union using EU examples.
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Extract B, Paragraph 2
ASEAN's development as a trading bloc has created both opportunities and challenges. Member states report increased intra-regional trade and investment, but some domestic industries face intensified competition. Thailand's automotive sector has expanded production networks across the region, while Indonesia's textile manufacturers have adapted to increased regional competition.
Explain two economic effects of joining a trading bloc using ASEAN examples.
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Extract D, Paragraph 2
The Southern African Customs Union (SACU) demonstrates how smaller economies adapt to trading bloc membership. While South Africa's manufacturing sector has expanded its regional presence, Botswana and Namibia have seen changes in their domestic industries. Some sectors have benefitted from wider market access, while others face adjustment challenges.
Explain two trade effects that smaller economies experience when joining a trading bloc.
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Extract B, Paragraph 2
A WTO dispute between Brazil and the United States over cotton subsidies highlights the organisation's role in trade conflicts. Brazil argued that US subsidies violated WTO agreements by artificially lowering global prices. After the WTO ruling in Brazil's favour, the US adjusted its subsidy programme, though implementation took several years due to domestic political pressures.
Explain two functions of the WTO.
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Extract A, Paragraph 2
Despite WTO efforts to liberalise global trade, implementation challenges persist. India's compliance with intellectual property rules has been gradual, while Canada maintains dairy industry protections. The WTO's influence is further tested by the unilateral actions of major economies and the rise of digital trade issues.
Explain two factors that limit the WTO's effectiveness in promoting free trade.
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