a. What is the difference between a free-trade area and a customs union? Provide examples of each.
b. Comment on the observation that the sign of a successful customs union is that world trade expands after it is formed.
c. Discuss the pros and cons of multilateral trade liberalization under the principle of unconditional MFN status versus the formation of regional trade arrangements.
d. Why was the formation of NAFTA so controversial in the United States but much less so in Canada?
e. Why was the formation of NAFTA so controversial in the United States, while the formation of the Canada–U.S. FTA was little noticed by most Americans?
f. Which conditions are likely to lead to a trade-diverting customs union?
To a trade-creating customs union?