Question

Identify and state the significance of each of the following trade-related entities: (a) the WTO; (b) the EU; (c) the Euro Zone; and (d) NAFTA.

Short answer

a. The WTO is to solve the trade dispute among the member nations.

b. The EU removes the trade among the member nation of Europe.

c. The Euro Zone is where the Euro as a common currency is used.

d. NAFTA removes the trade barrier among the United States, Canada, and Mexico.

Step-by-step solution

Step 1. Explanation for part (a)

The WTO is also known as World Trade Organisation. The significance of this organization is to remove all the disputes among the member nation and spread peace. It is also the sole international organization that sets up the global trade rules between nations and ensures the treaties are followed.

Step 2. Explanation for part (b)

The EU is also known as European Union. The EU works to support the member country of Europe by removing trade barriers. If the trade block is removed, the members get an opportunity to access other markets, which will increase their gain.

Step 3. Explanation for part (c)

The Euro Zone represents the area in Europe where only Euro is accepted as the common currency. The significance of the Euro Zone is to promote trade, encourage investment, and provide mutual support.

Step 4. Explanation for part (d)

NAFTA is also known as Non-American Free Trade Agreement. The organization removes trade barriers among the United States, Mexico, and Canada. It also helps to improve the working condition in North America.