Question

Explain five ways in which a country may suffer as a result of being a member of a trading bloc.

Answer 1

1. Loss of government revenue as no duty is imposed on goods to and from member countries.
2. Closing down of local industries due to unhealthy competition with goods from more established industries from member countries.
3. Unemployment for locals as they are not able to compete with more qualified people from member countries.
4. Limits consumer choice. Citizens may have a limited choice as they may get goods produced within the trading block due to barriers placed to non-member countries.
5. Compromising a country’s political ideology as the country adjusts itself to fit in the trading block.