Regional Trade Blocs
• Regional trade blocs are intergovernmental
associations that manage and promote trade
activities for specific regions of the world.
Major Trade Blocs
• EU (European Union )
• NAFTA (North American Free Trade Agreement)
• MERCOSUR (Mercado Comun del Cono Sur, also known as
Southern Common Markets (SCCM)
• ASEAN (Association of Southeast Asian Nations)
• SAARC (south Asian association for regional cooperation)
• Setting up a common market
• Continuous & balanced expansion
• Closer relations between the member states.
ACTIVITIES OF EU
• Elimination of custom duties, quantitative restrictions with
regard to export & imports.
• Establishment of a common custom tariff & commercial
• Abolition of all obstacles for movement of
persons, services & capital.
• Application of programmes in order to coordinate the
• Established in 1992
• Total six members-
Singapore, Brunei, Malaysia, Philippines, Thailand &
• To establish a common effective preferential tariffs
• The CEPT allows for tariffs cut ranging from 0.50% to
20.00% beginning with 15 products.
• In 1994, ASEAN countries formed AFTA in order to
develop inter ASEAN trade.
Objectives of AFTA
• To encourage inflow of foreign investment into
• To establish free trade area in the member
• To reduce tariff of the products produced in
ASEAN countries (40% value addition in the
ASEAN countries to the product value is treated
as manufactured in ASEAN countries).
• Initially bilateral trade between Canada & U.S.
• NAFTA went into effect in 1994 after the joining
• U.S.- Canada trade is the largest bilateral trade
in the world.
• The U.S. 1st Mexico’s & Canada largest trading
• NAFTA is a powerful trading bloc with a
combined population and GNP greater than 15
Provisions of NAFTA
• Duty-free market access.
• Trade rules- safeguard, subsidies, countervailing
& antidumping duties, health & safety standards.
• Rules on trade in services & investment
• Protection of intellectual property.
• Dispute settlement mechanism.
• Established in 1991 by Brazil, Argentina, Paraguay, Uruguay.
• These four members generate 70% GNP of south America.
• By 1996, MERCOSUR had abolished tariffs on goods
accounting for 90% of the trade between its members
countries, with remaining tariffs to be abolished by 2000.
• MERCOSUR & EU Signed a cooperation agreement to pave
the way for a free trade accord in 2001.
• Established in August 1983.
India, Bangladesh, Bhutan, Pakistan, Srilanka
The Maldives & Afghanistan
Objectives of SAARC
• To improve the quality of life & welfare of the people of
the member countries.
• To develop the region economically, socially & culturally
• To provide the opportunity to the people of the region to
live in dignity & to exploit their potentialities.
• To enhance the mutual assistance among member
countries in the areas of
economic, social, cultural, scientific & technical field.
• To enhance cooperation to other trade blocs.
• The council of ministers have signed the SAARC
preferential trading arrangement agreement on
April 11, 1993.
Objectives of SAPTA
• To gradually liberalize the trade among members of
• To eliminate trade barriers among SAARC countries
& reduce or eliminate tariffs.
• To promote and sustain mutual trade & economic
cooperation among member countries.