Fig. 1 shows the tariff rules for the Coastline Trading Bloc. Members may trade goods with each other without a tariff. Goods arriving from a country outsid...
Question 1 Report
Fig. 1 shows the tariff rules for the Coastline Trading Bloc. Members may trade goods with each other without a tariff. Goods arriving from a country outside the bloc are charged a 12% tariff.
(a) Define a trading bloc. [2]
(b) Which shipment shown would be charged the 12% tariff? [1]
(c) State three reasons why a company in Arbor may buy goods from Belpa rather than Darsen. [3]
(d) Explain two ways membership of the trading bloc could help an Arbor business increase trade. [4]
Answer Details
(a) A trading bloc is a group of countries [1] that agrees rules to make trade between member countries easier, such as reducing trade barriers [1].
(b) A shipment from Darsen to a Coastline Trading Bloc country [1] would be charged the 12% tariff, because Darsen is outside the bloc.
(c) A company in Arbor may buy from Belpa because no tariff is charged [1], so Belpa goods may have a lower final price [1]. There may also be less customs paperwork or delay [1]. Common trading rules and shorter delivery distance are further valid reasons.
(d) Zero or reduced tariffs make an Arbor business’s goods cheaper in member countries, so sales may rise [2]. Fewer border controls and common rules reduce time and administrative costs, making exports faster and easier [2]. Each explanation links a trading-bloc feature to increased trade.
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