TRADE BLOCS

FREE TRADE
Free Trade is a market model in which trade in goods and services between or within countries flow unhindered by government-imposed restrictions. Free trade is a term that includes:
Trade of goods without taxes (including tariffs) or other trade

barriers (e.g. quotas on imports or subsidies for producers)

Trade in services without taxes or other trade barriers

The absence of trade-distorting policies (such as taxes, subsidies,

regulations or laws) that give some firms, households or factors of production an advantage over others
Free access to markets and market information

Inability of firms to distort markets through government-

imposed monopoly or oligopoly power The free movement of labour between and within countries
The free movement of capital between and within countries

Trade Bloc
A trade bloc is a large free trade area formed by one or

more tax, tariff and trade agreements. Typically trade pacts that define such a bloc specify formal adjudication bodies, e.g. NAFTA trade panels. This may include even a more democratic and participative system, as the EU.
A trade bloc is established through a trade pact (or pacts)

covering different issues of the economic integration.

Description
The

South Asian Association for Regional Cooperation (SAARC) is an economic and political organization of eight countries in Southern Asia. In terms of population, its sphere of influence is the largest of any regional organization: almost 1.5 billion people, the combined population of its member states. It was established on December 8, 1985 by India, Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and Bhutan. In April 2007, at the Association's 14th summit, Afghanistan became its eighth member.

MEMBERS
Headquarters Kathmandu, Nepal Membership 8 member states,6 observers

Islamic Republic of Afghanistan Kingdom of Bhutan Republic of India Republic of Maldives State of Nepal Islamic Republic of Pakistan People's Republic of Bangladesh Democratic Socialist Republic of Sri Lanka

OBJECTIVES
To promote the welfare of the people of South-Asia

and to improve their quality of life. To accelerate economic growth. To promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields. To promote and strengthen collective self-reliance among the countries of South Asia. To contribute to mutual trust, understanding and appreciation of one anothers problems

History
In the late 1970s, Bangladesh's president Ziaur Rahman proposed

the creation of a trade bloc consisting of South Asian countries. The Bangladeshi proposal was accepted by India, Pakistan and Sri Lanka during a meeting held in Colombo in 1981. In August 1983, the leaders adopted thehich was held in New Delhi. The seven South Asian countries, which also included Nepal, Maldives and Bhutan, agreed on five areas of cooperation: Agriculture and Rural Development Telecommunications, Science, Technology and Meteorology Health and Population Activities Transport Human Resource Development

Free Trade Agreements

In 1993, SAARC countries signed an agreement to

gradually lower tariffs within the region, in Dhaka. Nine years later, at the 12th SAARC Summit at Islamabad, SAARC countries devised the South Asia Free Trade Agreement (SAFTA) which created a framework for the establishment of a free trade area covering 1.4 billion people. This agreement went into force on July 1, 2006. Under this agreement, SAARC members will bring their duties down to 20 per cent by 2007.

Political Issues
SAARC has intentionally laid more stress on "core issues"

mentioned before rather than more decisive political issues like;

the Kashmir dispute, between India and Pakistan

the Sri Lankan civil war.

However, political dialogue is often conducted on the

margins of SAARC meetings. SAARC has also refrained itself from interfering in the internal matters of its member states. During the 12th and 13th SAARC summits, extreme emphasis was laid upon greater cooperation between the SAARC members to fight terrorism.

Ineffectiveness
SAARC's inability to play a crucial role in integrating

South Asia is often credited to the political and military rivalry between India and Pakistan. It is due to these economic, political, and territorial disputes that South Asian nations have not been able to harness the benefits of a unified economy.

Dhaka 2005
The summit accorded observer status to People's

Republic of China, Japan, South Korea and United States of America. The nations also agreed to organize development funds under a single financial institution with a permanent secretariat, that would cover all SAARC programs ranging from social, to infrastructure, to economic ones.

DESCRIPTION
The ASEAN bloc was established on August 8, 1967, when foreign ministers of five countries Indonesia, Malaysia, the Philippines, Singapore, and Thailand met at the Thai Department of Foreign Affairs building in Bangkok and signed the

ASEAN Declaration, commonly known as the Bangkok Declaration.

It is an Association for Regional Cooperation among the Countries of Southeast Asia.

MEMBERS
ORIGINAL MEMBERS (1967)
Indonesia Malaysia Phillipines Singapore Thailand

Brunei Darussalam (January 1984)

Vietnam (July 1995)

Myanmar (July 1997 )

Cambodia (April 1999 )

Lao PDR (July 1997 )

FACTS AND FIGURES

Population - 500 million
Total Area - 4.5 million square kilometers Combined Gross Domestic Product - US$ 700

billion (approx)
Total Trade - US$ 850 billion (approx)
Source : www.aseansec.org

OBJECTIVES
To accelerate economic growth, social progress and

cultural development in the region

Preferential trading including reduced tariffs and non-

tariff barriers
Guaranteed member access to the markets throughout

the region
Harmonized Investment Incentives To promote regional peace and stability through abiding

respect for justice and the rule of law

ASEAN Free Trade Area

Agreement by the member nations of ASEAN

concerning local manufacturing in all ASEAN countries

Signed on January 28, 1992 in Singapore
Elimination of tariff and non-tariff barriers among

member countries

ASEAN Plus Three

A forum for ASEAN plus China, Japan and

South Korea primarily to deal with the trade and monetary issues facing Asia.
Meetings held during each ASEAN Summit May lead to a common market, single currency and

even a new Bloc comprising of Northeast and Southeast Asia.

ESTABLISHMENT AND MEMBERS

CARICOM was established by the Treaty of

Chaguaramas on 1st August 1973 and the four signatories were Barbados, Jamaica, Guyana and Trinidad and Tobago. Currently CARICOM has 15 full members, five associate members and seven observers.

STRUCTURE
CARICOM has organised itself into a state like Government structure made up of the following branches: The Executive, The Legislation and The Judiciary The goal of the Secretariat is To provide dynamic leadership and service, in partnership with Community institutions and Groups, toward the attainment of a viable, internationally competitive and sustainable Community, with improved quality of life for all."

CARICOM Single Market and Economy (CSME)

The CSME is an integrated development strategy (July 1989) has three key Features: 1. Deepening economic integration by advancing beyond a common market towards a Single Market and Economy. 2. Widening the membership and thereby expanding the economic mass of the Caribbean Community. 3. Progressive insertion of the region into the global trading and economic system by strengthening trading links with nontraditional partners

 Trade in goods: All goods which meet the CARICOM

rules of origin are traded throughout without restrictions. Caribbean Regional Organization on Standards and Quality (CROSQ): Responsible for establishing regional standards in the manufacture and trade of goods which all Member States must adhere to. Trade in Services and The Right of Establishment: The main objective is to facilitate trade and investment in the services sectors of CSME Member States through the establishment of economic enterprises and CARICOM service providers will be able to offer their services throughout the region

Work Permits and the Free Movement of People: The Caribbean Community (CARICOM) Free Movement of Persons Act, provides for the free movement of certain categories of skilled labour, (by applying for Skills Certificates) Harmonization of Legislation: Harmonized regimes for Anti-dumping and countervailing measures, Banking and securities, Consumer protection, Customs, Intellectual property rights etc. Free Movement of Capital and Single Currency: The free movement of Capital involves the elimination of the various restrictions such as foreign exchange controls and allowing for the convertibility of currencies or a single currency and capital market integration via a regional stock exchange.

COUNCIL MEMBERS
The United Arab Emirates
The State of Bahrain The Kingdom of Saudi Arabia The Sultanate of Oman The State of Qatar The State of Kuwait

OBJECTIVES
The basic objectives of the Cooperation Council are:
To effect coordination, integration and inter-connection

between

Member

States

in

all

fields.

Strengthening ties between their peoples.

Formulating similar regulations in various fields such as

economy, finance, trade, customs, tourism, legislation & administration. mining, agriculture, water and animal resources.

Fostering scientific and technical progress in industry,

Organization of the Cooperation Council

The Cooperation Council shall have the following main organizations:
1. The Supreme Council 2. The Ministerial Council 3. The Secretariat General.

PARTA
Pacific Regional Trade Association. Trade Agreement Type
Plurilateral Free Trade Agreement

Participating Nations
Australia, Cook Islands, Fiji, Kiribati, New Zealand,

Niue, Papua New Guinea, Solomon Islands, Tonga, Tuvalu, Western Samoa

Notes
A PARTA would represent a market of almost 29 million

and a total GDP of US $657.7 billion (of which Australia and New Zealand account for US $640 billion).

Negotiations

At the 1997 meeting of the Forum Economic Ministers

Meeting in Cairns, it was agreed that a study be undertaken on options for the creation of a FTA among FICs. In 1998, the Forum Leaders directed the Forum Trade Ministers to consider a draft Framework Agreement for the creation of a FTA. A number of studies have been completed and at the South Pacific Forum (28-30 August) in Nadji, Fiji, negotiations for a Pacific Regional Trade Agreement (PARTA) began. The Forum members will have an eight year timetable to eliminate tariff barriers, while the nine Forum members who are Smaller Island States will have ten years to do so.

Contd....
By 2012, it is expected that the free trade area across

the Forum Island Countries will be complete. In March 2001, Perhaps the most contentious issue amongst Forum Island Countries, and therefore, obstacle to a RTA is how to include Australia and New Zealand in a reciprocal Free Trade Agreement without disadvantaging the smaller Pacific Island economies.

REFERENCES
About SAARC. Retrieved November 20,2007 from http://www.saarc

sec.org/main.php About SAARC Summits. Retrieved November 20,2007 from http://en.wikipedia.org/wiki/southasian Association For Regional Cooperation About ASEAN. Retrieved November 25,2007 from http://www.aseansec.org/7069.htm About ASEAN Summits. Retreived Novemeber 25,2007 http://en.wikipdia.org/wiki/Association_of_Southeast_Asian_nations# ASEAN_Summit Levi, W. Noel. Can Protectionism be eliminated in the 21st century?. Retreived May 17, 1999 from www.Forumsec.org.fj/news About CARICOM. Retrieved November 24,2007 from http://en.wikipedia.org/wiki/Carribean Community About GCC. Retrieved November 26,2007 from http://www.gcc-sg.org/