4.4.2—Trading blocs

Trading blocs remove barriers between members to different degrees. A free-trade area removes internal tariffs but lets each member set its own external policy; a customs union adds a common external tariff. A common market also allows freer movement of factors, while an economic or monetary union coordinates wider policies and may share a currency.

As integration deepens, internal transactions may become easier, but members give up more independent policy choices. Always name the feature that distinguishes the bloc rather than treating every agreement as a customs union.