Cambridge International as and a level Economics Ebook

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Denmark’s current 
account position as 
% of GDP
2007
21.9
1.6
4.7
2.1
2008
12.5
0
4.4
1.2
2009
–3.9
–1.8
8.5
1.5
2010
40.4
1.9
14.2
2.9
2011
50.0
2.2
18.3
4.6
2012
49.0
2.3
19.7
5.4
2013
67.0
3.5
16.7
4.7
Table 4.7 
Canada’s and Denmark’s current account positions
Trade bloc: 
a regional group of countries that have entered 
into trade agreements.
Free trade area: 
a trade bloc where member governments 
agree to remove trade restrictions among themselves.
Customs union: 
a trade bloc where there is free trade 
between member countries and a common external tariff on 
imports from non-members.
KEY TERMS
105

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Cambridge International AS Level Economics
on trade with non-members. Th
e world’s oldest customs 
union is the Southern Africa Customs Union (SACU). 
Its members include Botswana, Lesotho, Namibia, South 
Africa and Swaziland. Th
ese countries impose the same 
tariff on goods being imported from outside the trading 
bloc. Th
e countries share tariff revenues and coordinate 
some trading policies.
Economic unions
An 
economic union
includes even more economic 
integration. In this case, restrictions are removed on the 
movement not only of goods and services, but also capital 
and labour. Mercosur is a South American trading bloc 
which has Argentina, Brazil, Paraguay, Uruguay and 
Venezuela as full members. It is seeking to create a single 
market across the members. Th
e European Union (EU) is 
even more integrated. It operates a single market and its 
members have adopted the same policies on a number of 
labour market and social issues. Most of the members have 
adopted the same currency, the euro, and the European 
Central Bank operates a single interest rate. 
Figure 4.23 
shows the membership of the EU in 2014.
Monetary union involves economies operating the same 
currency, as the members of the euro area do. Full economic 
union is the fi nal stage of integration. Th
is involves the