Scenario: Learning the Americas' Way
The newly-formed countries that emerged after the break-up of the United Frontier States (UFS) are interested in learning more about integration in the Americas. Because the former UFS nations have many similarities with the countries of North and South America, they believe they can learn from the integration experience in the Americas. To that end, they pose the following questions.
-________ is an example of a free trade agreement.
A) NAFTA
B) Mercosur
C) European Union
D) APEC

Question

Quizplus · Accepted Answer

NAFTA (North American Free Trade Agreement) is an agreement between the United States, Canada, and Mexico to eliminate barriers to trade and investment between the three countries. It is a prime example of a free trade agreement in the Americas.

B) Mercosur (Southern Common Market) is a custom union between Brazil, Argentina, Paraguay, and Uruguay. While it eliminates tariffs on trade in goods and services, it also imposes a common external tariff on non-member countries. Therefore, it is not a purely free trade agreement.

C) European Union is not an example of a free trade agreement in the Americas, as it is a political and economic union comprised of European countries.

D) APEC (Asia-Pacific Economic Cooperation) is a forum for promoting free trade and cooperation among countries in the Asia-Pacific region. While it includes some countries in the Americas, it is not solely focused on the Americas and therefore not a purely free trade agreement in the Americas.