What is trade area and tariff barriers?

Trade area refers to the zones in which trade is promoted and there are less trade barriers while trading of goods and services. a globalising economy, it is perhaps surprising that countries increasingly trade with their nearest neighbours. One explanation is geography: as countries have lowered their TARIFF barriers, the relatively greater importance of transport costs makes proximity matter more. According to NEW TRADE THEORY, this also produces gains from ECONOMIES OF SCALE.