Scenario: Zucoland
Zucoland, a small-sized country just south of the Andes mountain range was invited to join a regional trading bloc. The government of Zucoland is considering the benefits and costs of joining such a bloc. The government is attracted by the fact that this trading bloc requires Zucoland to give up the least amount of sovereignty than other types of blocs.
-Which of the following would you suggest is a drawback(s) of a regional trading bloc?

Question

Quizplus · Accepted Answer

All of the options can be drawbacks of regional trading blocs. Joining a trading bloc can lead to a loss of national sovereignty as policies and regulations may have to be aligned with those of other member countries. Economic integration may also lead to shifts in employment as certain industries become more competitive or other countries may have a comparative advantage. Additionally, trade diversion can occur as member countries may prioritize trade with each other over non-member countries, potentially leading to inefficiencies and reduced gains from trade.

Scenario: Zucoland Zucoland, a Small-Sized Country Just South of the Andes Mountain