REGIONAL TRADE BLOCS by M. Tarunkumar (0228) M.Sireesha (0229) N.ChaitanyaSudha (0230)
Regional Trade Blocs
It’s a “prefrential trade agreement”(PTA) between a subset of countries designed to remove trade barriers within member countries.
It refers to a regional trade agreement or integration.
It also referred to as a natural trade bloc.
Major Trade Blocs in the world 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)
PRINCIPLES & CHARACTERISTICS
It implies a reduction or estimation of barriers to trade.
Trade liberalisation is discriminated .
It exists as well regional integration agreements.
It also entail deeper forms of integration for instance of international competition.
CAUSES OF TRADE BLOCS
The so called “old regionalism” was motivated by the desire to import development at a regional level.
To insulate a region from the world economy and to stablise at a regional level.
It played major role in political and economical considerations.
Not only concessions can be easily exchanges a small number of countries .
Trade blocs may serve to pursue non economic objectives
TYPES OF TRADE BLOCS
Free trade areas
Transactions costs will be eliminated.
Uncertainity caused by exchange rate flactuations eliminated.