Definition : Regional trade blocks are intergovernmental associations that manage and promote trade activities for specific regions of the world They have political as well as political implications for example the European union , the worlds largest trading block has harbored political ambitions. The Maastricht treaty which gave birth to EU calls for joint policies in regard to military , defense, and citizenship
MAJOR TRADE BLOCKS
1) EUROPEAN UNION (EU)
2) NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
3)SINGAPORE –AMERICAN FREE TRADE AGREEMENT(SAFTA)
4) ORGANISATION OF PETROLEUM EXPORTING COUNTRIES (OPEC)
5) ASSOCIATION OF SOUTH EAST ASIAN NATION (ASEAN)
6) SOUTH ASIAN ASSOCIATION OF REGIONAL CO-OPERATION (SAARC)
DEBATE ON TRADING BLOCKS
THERE ARE TWO VIEWS :
1)ANALYST LIKE PREEG ARGUE THAT TRADE BLOCS ARE DESIRABLE BECAUSE THEY COMPLIMENT GLOBAL TRADE.
2)OTHER ANALYST ARGUE THAT TRADE BLOCS ARE NOT DESIRABLE BECAUSE THEY ARE THREAT TO FREE TRADE AND NEED TO PROTECTIONISM
WHY TRADE BLOCS ARE DESIRABLE
TRADE BLOCS COMPLIMENT GLOBAL TRADE
THEY PROTECT INTRA REGIONAL TRADE FORM OUTSIDE FORCES.
THEY ESTABLISH REGIONAL SECURITY.
WHY T. B. ARE UNDESIRABLE
IMPORT QUOTAS(LIMITING THE AMOUNT OF IMPORTS INTO THE COUNTRY SO THAT DOMESTIC CONSUMERS BUY PRODUCTS MADE BY THEIR COUNTRIES IN THEIR REGION).
CUSTOM DELAYS (ESTABLISHING BUREAUCRATIC FORMALITIES THAT SLOW DOWN TRADE FROM THE OTHER REGION)
SUBSIDIES BARRIER (GIVING HEAVY SUBSIDIES TO PROTECT REGIONAL TRADE )
VOLUNTRY BOYCOTTS AND TECHNICAL BARRIERS.
The Organization of the Petroleum Exporting Countries (OPEC)
The Organization of the Petroleum Exporting Countries (OPEC) is a permanent, intergovernmental Organization, created at the Baghdad Conference on September 10–14, 1960.
The OPEC MCs coordinate their oil production policies in order to help stabilise the oil market and to help oil producers achieve a reasonable rate of return on their investments. This policy is also designed to ensure that oil consumers continue to receive stable supplies of oil.
OPEC FUND: The OPEC Fund for International Development is a multilateral development finance institution. It was established in January 1976, by the member countries of the Organization of the Petroleum Exporting Countries.
The Secretariat carries out the executive functions of the Organization in accordance with the provisions of the OPEC Statute and under the direction of the Board of Governors
Members: Algeria, Angola, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE, Venezuela.
The Organization of the Petroleum Exporting Countries (OPEC)
IT’S A PERMANENT ORGANIZATION ESTABLISHED IN 1960 AT THE BAGHDAD CONFERENCE BY IRAN IRAQ, KUWAIT, SAUDI ARABIA, AND VENEZUELA.
IT WAS LATER JOINED 8 OTHER MEMBERS.
ITS HEAD QUARTER IS IN VIENNA.
ITS OBJECTIVE IS TO COORDINATE AND UNIFY PETROLEUM POLICIES AMONGS THE MEMBER COUNTRIES
TO SECURE FAIR AND STABLE PRICES FOR PETROLEUM PRODUCERS.
PROPER PRICE AND REGULAR SUPPLY OF PETROLEUM FOR CONSUMING NATIONS.
ESTABLISHED IN 1967 .
5 FOUNDING MEMBERS : INDONESIA , MALAYASIA, PHILLIPINES, SINGAPORE AND THILAND.
LATER ON JOINED BY BRUNEI, MYANMAR,VIETNAM ETC.
ASEAN FREE TRADE AREA (AFTA) .
ASEAN BEYOND TRADE HAS POLITICAL ROLE AS VISIBLE BY THE FORMATION OF ASEAN REGIONAL FORUM OF WHICH CHINA, INDIA AND USA ARE MEMBERS.
ASEAN AS A TRADING BLOC HAS BEEN A HUGE SUCCESS LEADING TO PROSPERITY AND ELIMINATION OF POVERTY IN THE MEMBER COUNTRY
SAARC (SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION)
The South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally adopted on December 8, 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.
SAARC provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to accelerate the process of economic and social development in Member States.
AREAS OF COOPERATION
Agriculture and Rural Development;
Health and Population Activities;
Women, Youth and Children;
Environment and Forestry;
Science and Technology and Meteorology;
Human Resources Development; and
Recently, high level Working Groups have also been established to strengthen cooperation in the areas of Information and Communications Technology, Biotechnology, Intellectual Property Rights, Tourism, and Energy.
Fourteenth SAARC Summit
The President of the Islamic Republic of Afghanistan, His Excellency Mr. Hamid Karzai; the Chief Adviser of the Government of the People’s Republic of Bangladesh, His Excellency Dr. Fakhruddin Ahmed; the Prime Minister of the Kingdom of Bhutan, His Excellency Lyonpo Khandu Wangchuk; the Prime Minister of the Republic of India, His Excellency Dr. Manmohan Singh; the President of the Republic of Maldives, His Excellency Mr. Maumoon Abdul Gayoom; the Prime Minister of Nepal, Rt. Hon’ble Mr. Girija Prasad Koirala; the Prime Minister of the Islamic Republic of Pakistan, His Excellency Mr. Shaukat Aziz; and the President of the Democratic Socialist Republic of Sri Lanka, His Excellency Mr. Mahinda Rajapaksa, met at the Fourteenth Summit meeting of the South Asian Association for Regional Cooperation (SAARC) held in New Delhi, India on April 3-4, 2007.
The Heads of State or Government welcomed the entry of the Islamic Republic of Afghanistan into SAARC. This was a historic moment as Afghanistan assumed its rightful place as a valued member of the SAARC fraternity
The SAARC Secretariat
The SAARC Secretariat was established in Kathmandu on 16 January 1987. Its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the Association and serve as the channel of communication between SAARC and other international organisations. The Secretariat has also been increasingly utilised as the venue for SAARC meetings.
The Secretariat comprises the Secretary General, seven Directors and the General Services Staff. The details of its officials and working divisions responsible for areas of work can be viewed under respective links.
The SAARC Secretariat
1. SAARC Agricultural Information Centre (SAIC), Dhaka
2. SAARC Meteorological Research Centre (SMRC), Dhaka
3. SAARC Tuberculosis Centre (STC), Kathmandu
4. SAARC Documentation Centre (SDC), New Delhi
5. SAARC Human Resources Development Centre (SHRDC), Islamabad
6.SAARC Coastal Zone Management Centre, Maldives
7. SAARC Information Centre, Nepal
8.SAARC Energy Centre, Pakistan
9.SAARC Disaster Management Centre, India
BORN IN 1985
7 MEMBERS COUNTRIES :BANGLADESH, BHUTAN, INDIA,MALDIVES,NEPAL,PAKISTAN AND SRI LANKA
IT HAS 1.3 BILLION INHABITANTS
REPRESENTS 22% OF THE WORLD POPULATION BUT ONLY 1.9% OF THE WORLD GNP.
SAARC HAS BEEN A SHEER FAILURE.
THE TOTAL EXTERNAL TRADE OF THE REGION – 0.8% OF WORLD EXPORTS AND 1.3% OF WORLD IMPORTS
THE REASON BEING POLITICAL DISPUTE BETWEEN MEMBER COUNTRIES
STILL SOME PROGRESS HAS BEEN ACHIEVED
SAPTA (SOUTH ASIAN PREFERENTIALTRADING AGREEMENT) HAS COME INTO FORCE IN 1995
CONSENSUS ON SAFTA(SOUTH ASIAN FREE TRADE AREA)HAS BEEN REACHED
North American Free Trade Agreement
The North American Free Trade Area is the trade bloc in North America created by the North American Free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the The North American Agreement on Labor Cooperation (NAALC), whose members are Canada , Mexico and the United States . It came into effect on 1 January 1994 .
NAFTA Initialing Ceremony, October 1992. From left to right: (Standing) Mexican President Salinas , US President Bush , Canadian Prime Minister Mulroney (Seated) Jaime Serra Puche , Carla Hills , Michael Wilson .
History of the implementation
The agreement was initially pursued by conservative governments in the United States and Canada supportive of free trade, led by Canadian Prime Minister Brian Mulroney , U.S. President George H. W. Bush , and the Mexican President Carlos Salinas de Gortari .
The three-nation NAFTA was signed on 17 December 1992, pending its ratification by the legislatures of the three countries.
There was considerable opposition in all three countries, but in the United States it was able to secure passage after Bill Clinton made its passage a major legislative initiative in 1993.
The NAFTA Secretariat
The NAFTA Secretariat, comprised of a Canadian Section, a Mexican Section and a United States Section, is responsible for the administration of the dispute settlement provisions of the North American Free Trade Agreement (NAFTA).
Objectives ( Article 102 )
The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to:
a) eliminate barriers to trade in, and facilitate the cross-border movement of, goods and services between the territories of the Parties;
b) promote conditions of fair competition in the free trade area;
c) increase substantially investment opportunities in the territories of the Parties;
d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;
e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and
f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.
2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.
Relation to Other Agreements Article 103
The Parties affirm their existing rights and obligations with respect to each other under the General Agreement on Tariffs and Trade and other agreements to which such Parties are party.
In the event of any inconsistency between this Agreement and such other agreements, this Agreement shall prevail to the extent of the inconsistency, except as otherwise provided in this Agreement.
BORN IN JANUARY 1994.
MEMBER NATIONS:US,CANADA AND MEXICO.
it’s the WORLD LARGEST FREE TRADE AREA.
UNDER NAFTA, ALL NON TARIFF BARRIERS TO AGRICULTURE WERE ELIMINATED.
MANY TARRIFFS ARE BEING ELIMINATED OVER A PEROID OF 5-15 YRS.
TWO WAY TRADE BETWEEN US & MEXICO HAS INCREASED BY MORE THAN 55%.($11.6 BILLION).
TWO WAY TRADE BETWEEN US &CANADA INCREASED MORE THAN 50%(16.3 BILLION.)
HUGE BENEFITS HAVE ACCRUED TO THE NAFTA MEMBER COUNTRIES.
NAFTA HAS BEEN A ROARING SUCCESSS.
IT IS A FAMILY OF DEMOCRATRIC EUROPEAN COUNTRIES.
COMMITED TO WORKING TOGETHER FOR PEACE AND PROSPERITY.
ITS HISTORICAL ROOTSLIE IN THE SECOND WORLD WAR.
IDEA OF EUROPEAN INTEGRATION WAS CONCEIVED TO PREVENT SUCH KILLING AND DESTRUCTION FROM EVER HAPPENING AGAIN.
Member states of the EU :
Austria , Belgium , Bulgaria , Cyprus , Czech Republic , Denmark , Estonia , Finland , France , Germany , Greece , Hungary , Ireland , Italy , Latvia , Lithuania , Luxembourg , Malta , Netherlands , Poland , Portugal , Romania , Slovakia , Slovenia , Spain , Sweden , United Kingdom
The Euro: Our Currency
The euro is the currency of 13 European Union countries: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Slovenia and Finland.
Euro banknotes and coins have been in circulation since 1 January 2002 and are now a part of daily life for 315 million Europeans living in the euro area
The Eurosystem , which consist of the European Central Bank (ECB) and the national central banks of the 13 countries belonging to the euro area, has the exclusive right to issue euro banknotes. All decisions on the designs, the denominations, etc. of the euro banknotes are taken by the ECB.
The conduct of monetary policy
The Eurosystem is in charge of defining and implementing the monetary policy of the euro area. Its primary objective in this respect is to maintain price stability in the euro area. It furthermore conducts foreign-exchange operations (consistent with the exchange-rate policy defined by the Council), holds and manages the official foreign reserves of the euro-area Member States and promotes the smooth operation of payment systems
Origins of the euro: Early days of the European Union
19 September 1950: European Payments Union (EPU)
18 April 1951: European Coal and Steel Community established
25 March 1957: Treaty of Rome
29 December 1958: European Monetary Agreement
FIVE EU INSTITUTIONS
EUROPEAN PARLIAMENT.(ELECTED BY PEOPLES OF MEMBER STATES)
COUNCIL OF EUROPEAN UNION(REPRESENTING THE GOVERNMENTS OF MEMBER STATES).
EUROPEAN COMMISION(DRIVING FORCE AND THE EXECUTIVE BODY).
COURT OF JUSTICE.
COURT OF AUDITORS.
THE RULE OF LAW IS FUNDAMENTAL TO THE EUROPERAN UNION.ALL EU DECISIONS ARE BASED ON TREATIES.,WHICH ARE AGREED BY ALL EU CONTRIES.
EU CONSISTED OF JUST 6 COUNTRIES: BELGIUM,GERMANY,FRANCE,ITALY,LUXEMBOURG & NETHERLANDS.
FURTHER ADDITIONS HAVE BEEN REAPEATEDLY TAKEN PLACE.
LAST INCREASE TOOK PLACE IN 2004,WITH 10 NEW COUNTRIES JOINING IN.
IT HAS ENSURE FREEDOM,SECURITY & JUSTICE.
REGIONAL DEVELOPMENT & ENVIRONMENTAL PROTECTION.
IT HAS HELPED RAISED LIVING STANDARDS,BUILT A SINGLE EUROPE WIDE MARKET.
LAUNCHED THE SINGLE EUROPEAN CURRENCY- THE EURO.
IT HAS STRENGTHNED EUROPES VOICE IN THE WORLD.
WHY ASEAN IS SUCCESSFUL AND SAARC HAS BEEN UNSUCCESSFUL.
ASEAN IS ONE OF THE MAJOR TRADING BLOCS IN THE WORLD
IT REPRESENTS 420 MILLION PEOPLE.
It's a LARGER TRADE BLOCK THAN NORTH AMERICA AND WESTERN EUROPE.
SAARC REPRESENTS 22% OF HUMANITY.
THERE IS A CONTRADICTION, AN IRONY BETWEEN ASEAN & SAARC.
WHILE ASEAN HAS BEEN A ROARING SUCCESS & CALLED ASIAN TIGERS ,SAARC HAS BEEN A SHEER FAILURE.
IN ASEAN ALL COUNTRIES ARE OF EQUAL GEOGRAPHIC SIZE.
LEVEL OF ECONOMIC DEVELOPMENT IS THE SAME IN ALL COUNTRIES.
COMMON FEAR OF COMMUNIST CHINA
ALL OF THEM HAD SIMILAR ECONOMIC POLICIES.THEY ALL INTRODUCED ECONOMIC LIBERALIZATION IN 1960s WHICH FURTHER ACCLERATED ECONOMIC GROWTH.
WAY OF FUNCTIONING OF ASEAN BASED ON TWO PRINCIPLES:
INDIAs TRADE WITH ASEAN IS MORE THAN 20 TIMES THAN IN CASE OF SAARC.
IN SOUTH ASIA INDIA IS THE LARGEST COUNTRY.IT OCCUPIES MORE THAN 70% OF GEOGRAPHICAL AREA.
SO OTHER NATIONS FEEL THAT STRENGTHENING SAARC MEANS EMPOWERING INDIA.
SERIOUS BILATERAL DISPUTES BETWEEN TWO MAJOR SOUTH ASIAN POWERS i.e INDIA & PAKISTAN.
BILATERAL DISPUTES AND DIFFERENCES BETWEEN OTHER MEMBER COUNTRIES.
INDIA ,NEPAL DISPUTE.
NEPAL MYNMAR DISPUTE.
PAKISTAN BANGLADESH DISPUTE.
VAST DIFFERENCE IN ECONOMIC DEVELOPMENT..
INDIA IS A DEVELOPED ECONOMY OF SOUTH ASIA .OTHER CONTRIES ARE LESS DEVELOPED.
PURCHASING POWER OF T HESE CONTRIES IS VERY LOW.THEY CANNOT ACT EVEN AS A MARKET OF INDIAN GOODS.