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  1. 1. TRADING BLOCKSGeorge V James
  2. 2. ContentsMeaningTypes of Trading BlocksMajor Trading BlocksVarious Blocks in brief
  3. 3. MeaningGroup of countriesExistence within a geographical region.Motive is to protect themselves from theimports of non-membersA form of economic integrationincreasingly shaping the pattern ofworld trade.
  4. 4. TYPES OF TRADING BLOCSMajor Types of Trading Blocs:-1.Preferential Trade Area (PTA’s)2.Free Trade Area3.Customs Union4.Common Market
  5. 5. MAJOR TRADE BLOCSA. EU (European Union)B. NAFTA (North American Free TradeAgreement)C. OPEC (Organisation of Petroleum ExportingCountries)D. ASEAN (Association of South East AsianNations)E. SAARC ( South Asian Association forRegional Cooperation)F. MERCOSUR (Mercado Comun del ConoSur, also known as Southern CommonMarkets (SCCM)
  6. 6. A. European Union (EU) The world’s largest trading bloc. The 2ndlargest economy in the world. Originally called the “Economic Community”.(Common Market or The Six) Formed from the ‘Treaty of Rome’ in 1957. It comprised of 6 members- Germany, France, Italy,Belgium, Netherlands and Luxemburg. At present it comprises of 27member states.
  7. 7. Objectives of European UnionSetting up a common market for allgoods & services by eliminating alltrade barriers.Promoting free trade among themembers.Continuous and balanced expansion.Closer relations between the memberstates.
  8. 8. B. North American Free TradeAgreement (NAFTA) Initially bilateral trade between Canada & U.S. NAFTA went into effect in January 1,1994 afterthe joining of Mexico, creating a trilateral tradebloc in North America. World’s largest free trade area. NAFTA has two supplements: the North AmericanAgreement on EnvironmentalCooperation (NAAEC) and the NorthAmerican Agreement on LabourCooperation (NAALC).
  9. 9. Provisions of NAFTAEliminate barriers to trade & investmentbetween US, Canada & Mexico.Duty-free market access.Trade rules- safeguard, subsidiescountervailing & antidumping duties, health& safety standards.Rules on trade in services & investment.Protection of intellectual property.Dispute settlement mechanism.
  10. 10. C. Organisation of Petroleum ExportingCountries (OPEC) A permanent, intergovernmental Organization, created atthe Baghdad Conference on September 10–14, 1960 ( Iraq,Kuwait, Iran, Saudi Arabia and Venezuela ). Later joined by 8 more countries. The main objective is to coordinate and unify petroleumpolicies among the member countries. To secure fair and stable price for petroleum producers. Proper price and regular supply for petroleum consumingnations. Its Headquarter is in Vienna, Austria.
  11. 11. D. Association of Southeast AsianNations (ASEAN)Formed 8thAugust,1967 (Indonesia, Malaysia,Philippians, Singapore & Thailand)Later joined by Brunei, Burma, Cambodia,Laos & VietnamEstablished ASEAN Free Trade Area (AFTA)Headquarter- Jakarta, Indonesia.
  12. 12. Aims of AFTA:-Primary goals of AFTA are:-To encourage inflow of foreign investmentinto this region.To establish free trade area in the membercountries.To reduce tariff of the products produced inASEAN countries.
  13. 13. Objectives of ASEANAccelerating Economic Growth.Social Progress.Cultural Development among itsmembers.Protection of regional peace andstability.Discuss issues peacefully.
  14. 14. E. South Asian Association forRegional Cooperation (SAARC) Established on 8thDecember 1985 Member Countries- Bangladesh, Bhutan, India,Maldives, Nepal, Pakistan & Sri Lanka Headquarter- Kathmandu, Nepal
  15. 15. Objectives of SAARC to promote the welfare of the people of South Asiaand to improve their quality of life to accelerate economic growth, social progress andcultural development in the region to promote and strengthen selective self-relianceamong the countries of South Asia to contribute to mutual trust, understanding andappreciation of one anothers problems to strengthen cooperation with other developingcountries to maintain peace in the region
  16. 16. The SAARC Secretariat
  17. 17. SAPTA• The council of ministers have signed theSAARC preferential trading arrangementagreement on April 11, 1993.Objectives:- To gradually liberalize the trade amongmembers of SAARC To eliminate trade barriers among SAARCcountries & reduce or eliminate tariffs To promote and sustain mutual trade &economic cooperation among membercountries
  18. 18. F. MERCOSUR; Mercado Comun delCono Sur• Established in 1991 by Brazil, Argentina,Paraguay, Uruguay.• These four members generate 70% GNP of SouthAmerica.• By 1996, MERCOSUR had abolished tariffs ongoods accounting for 90% of the trade between itsmembers countries, with remaining tariffs to beabolished by 2000.• MERCOSUR & EU Signed a cooperationagreement to pave the way for a free trade accordin 2001.