Chapter 9, Problem 1CDQ

Summary Introduction

Case summary:

Continent AF has a very little inside trade and has significant trade barriers which limits the movement of goods. AF countries are more likely trade with Countries in E and Countries in A than the other countries. In the year 2015, countries of 26 members joined and create a common market. This is known as tripartite free trade area.

If this becomes successful, then Continent AF can achieve the greater economies of scale and can lower the cost.

Character in the case:

• Countries in continent AF
• Countries in continent E
• Countries in A

To discuss: The reason for Countries in AF to more likely trade with Countries in E and Countries in A than the other countries.

Introduction:

A trade policy which does not restricts the movement of goods and services that is import and export especially on international trade refers to the free trade.