Question

What is the difference between a free trade association, a common market, and an economic union?

Short answer

Free trade association eliminates the barrier of trade.

The common market helps in the trading of labor and capital mobility.

An economic union helps in coordinating monetary and fiscal policy.

Step-by-step solution

Definition

Trade is the exchange of anything between two countries or between groups of countries.

Explanation

Free trade association helps in making easy trading between countries by removing barriers of trade on the other hand common market provides free trading of labor as well as capital between countries by implementing custom union and on another hand, an economic union provides free trading between groups of economies or countries by the coordination of policies like monetary and fiscal.