Question

Q26) Arrange the following in correct sequence

1. Common market

2. Customs union

3.Preferential trade agreement

4. Free trade agreement

• A. a) 3-4-2-1.
• B. b) 4-3-2-1.
• C. c) 2-1-3-4.
• D. d)1-2-3-4

Answer 1

The correct option is A

a) 3-4-2-1.

Ans 26: A

Explanation: A preferential trade area (also preferential trade agreement, PTA) is a trading bloc that gives preferential access to
certain products from the participating countries. This is done by reducing tariffs but not by abolishing them completely. A PTA can be
established through a trade pact.
A free-trade area is the region encompassing a trade bloc whose member countries have signed a free-trade agreement (FTA). Such
agreements involve cooperation between at least two countries to reduce trade barriers – import quotas and tariffs – and to increase
trade of goods and services with each other
A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. The participant countries
set up common external trade policy
A common market is a Group formed by countries within a geographical area to promote duty free trade and free movement of labor
and capital among its members. European community (as a legal entity within the framework of European Union) is the best known
example. Common markets impose common external tariff (CET) on imports from non-member countries.