This PPT explain the trade block

2. Trade Policy
International trade policies deal with the
policies of national governments relating
to export and import of various goods
and services to various countries either
equal terms of condition or
discriminatory terms of conditions.
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3. India Trade policy Trend
 Till the early 1990s, India was a closed economy;
 Average tariffs exceeded 200 percent,
 Quantitative restrictions on imports were
extensive;
 There were stringent restrictions on foreign
investment;
 country began to cautiously reform in the 1990s;
 India’s trade to GDP ratio has increased from 15
percent to 35 percent of GDP between 1990 and
2005;
 India has recently signed Regional and Bilateral
Trade Agreements.
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4. Objective of Int. trade policy
From
 To protect the domestic industry; and
 To build competency of domestic industry.
 To accumulate foreign exchange.
To
 Optimization of scare resources.
 Consumer benefit.
 Market Access.
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5. Objective of Indian trade
policy
 To double the percentage share
of global merchandise trade within the
next five years.
 To act as an effective instrument
of economic growth by giving a thrust
to employment generation.
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6. Protectionism Vs Free trade
A/C to Adam Smith , “Free trade is the
system of commercial policy which draws
no restriction between domestic and
foreign commodities and , therefore neither
impose burden on latter, nor grants any
special favor to the former”.
Protectionism is the economic policy of
restraining trade between states, through
methods such as tariffs on imported goods,
and giving subsidy to domestic industry.
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7. Instrument of Int. Trade policy
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8. Why Trade policy?
 Political Argument
National security;
Protecting industry;
Protecting jobs; and
Retaliation;
 Economic Argument
Infant industry; and
strategic trade policy.
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9. Shift from protectionism to free
Trade
 Protectionism leads to inefficiency in
domestic industry.
 Customer are paying more price to the
domestic product due to inefficiency.
Hence, moving from protectionism to
free trade, trade block work as a
intermediary.
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10. Bilateral Trade
Bilateral Trade Agreements are between
on two nations at a time. They are fairly
easy to negotiate, and give those two
nations favored trading status between
each other.
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11. Multilateral trade
Multilateral trade agreements are between
many nations at one time. For this reason,
they are very complicated to negotiate, but
are very powerful once all parties sign the
agreement.
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12. Status of Indian Trade Agreement
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INDIA'S TRADE AGREEMENTS AT A GLANCE
Existing Ongoing FTAs /PTAs under Study and
Consideration
• Bankok Agreement
• Global System of Trade
Preferences (GSTP)
• SAARC Preferential Trading
Agreement (SAPTA)
• India-Sri Lanka FTA
• India - Thailand FTA
• India Singapore
Comprehensive Economic
Cooperation (CECA)
• Indo-Nepal Trade Treaty
• India-Mauritius PTA
• India-Chile PTA
• Indo-ASEAN CECA
• South Asian Free Trade
Agreement (SAFTA)
• BIMSTEC (Bay of Bengal
Initiative for Multi-Sectoral
Technical & Economic
Cooperation)
• India - MERCOSUR PTA
• Gulf Cooperation Council
(GCC)
• China
• South Korea
• Japan
• Malaysia
• Pakistan
• Southern African Customs
Union (SACU)
• Egypt
• Israel
• Russia
• Australia
Source:http://www.indianindustry.com/trade-information/trade-agreements.html

13. Trade Blocks
A trade bloc is a type of
intergovernmental agreement, often part
of a regional intergovernmental
organization, where regional barriers to
trade (tariffs and non-tariff barriers) are
reduced or eliminated among the
participating states.
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14. Level of Economic Integration
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15. Complexity with integration
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16. Benefit or Loss from Trade
Block
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17. Cont..
With no trade With trade bloc With free trade
Price and
Quantity
Pz Q1 Pz+sa,
Qz+sa
Pw
Trade
Creation
- EAB DAC
Trade
Diversion
ADC BFC -
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18. NAFTA- FTA
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19. Custom Union- Andean
Community
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20. Common Market
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21. Economic Union & Political
Union
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22. Thank You
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