TRADING BLOCKS
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  • 1. TRADING BLOCKSGeorge V James
  • 2. ContentsMeaningTypes of Trading BlocksMajor Trading BlocksVarious Blocks in brief
  • 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. TYPES OF TRADING BLOCSMajor Types of Trading Blocs:-1.Preferential Trade Area (PTA’s)2.Free Trade Area3.Customs Union4.Common Market
  • 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. 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. 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. 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. 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. 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. 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. 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. Objectives of ASEANAccelerating Economic Growth.Social Progress.Cultural Development among itsmembers.Protection of regional peace andstability.Discuss issues peacefully.
  • 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. 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. The SAARC Secretariat
  • 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. 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.