European Free Trade Area - Explaining Brexit.

The video discusses the European Free Trade Area, highlighting its benefits such as tax-free trade among member countries. It explains the differences between a free trade area, single market, and customs union, focusing on how they handle external tariffs. The potential for exploitation in free trade areas is illustrated with a hypothetical scenario involving France, Australia, and the US. The video also covers the European Free Trade Association (EFTA), its members, and the costs associated with access. Finally, it explores the UK's options for trading with the EU post-Brexit, including remaining in the single market or customs union.

What is a key feature of a free trade area?

• Countries eliminate taxes, tariffs, and quotas among members.

• Countries set the same tariffs for external partners.

• Countries impose tariffs on each other's goods.

• Countries restrict trade with non-member nations.

How does a customs union differ from a free trade area?

• All members set the same tariffs for external countries.

• Members can set individual tariffs for external countries.

• It allows for more detailed trade negotiations.

• It exempts certain industries from trade agreements.

What is a potential downside of a free trade area?

• It can be exploited by setting up subsidiaries in countries with lower tariffs.

• It restricts trade with non-member countries.

• It requires all members to follow the same trade policies.

• It limits the ability to negotiate individual trade deals.

Which countries are part of the European Free Trade Association (EFTA)?

• Only EU member countries

• All European countries

• Only non-EU European countries

• EU countries plus Norway, Switzerland, Liechtenstein, and Iceland

What is a challenge for the UK if it negotiates trade deals independently with the EU?

• It will have to join the European Free Trade Association.

• It will not be able to trade with non-EU countries.

• It may face tariffs, taxes, and quotas on exports.

• It will automatically have access to the single market.