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REGIONAL TRADE BLOCKS

. member states within regional blocks also cooperate in economic. Estonia. Slovenia. Finland.496 trillion. import quotas. Malta. onerous bureaucratic import processes. regional trade blocks are associations of nations at a governmental level to promote trade within the block and defend its members against global competition. Thailand. GDP US$1. Lithuania. The Netherlands. 2. there are four major trade blocks and a larger number of blocks of regional importance. Spain. in 1992. then the European Community and. Malaysia. Over time evolved into the European Economic Community. Member States: Brunei Darussalam. Cambodia. Poland. The four major regional trade blocks are.In general terms. Denmark. France. ASEAN (Association of Southeast Asian Nations) asean Established on August 8. Slovakia. Sweden. These include Austria. Cyprus. EU Hungary. in Bangkok/Thailand. political. security. Since trade is not an isolated activity. Defense against global competition is obtained through established tariffs on goods produced by member states. Important Indicators for 2009: Population approximately 591 million. EU (European Union) Founded in 1951 by six neighboring states as the European Coal and Steel Community (ECSC). Myanmar. Laos. Luxembourg. Germany. Belgium. Philippines. 1967. Singapore. and technical and other non-tariff barriers. climatic. was finally transformed into the European Union. Bulgaria.536 trillion. as follows: 1. government subsidies. Czech Republic. Greece. Indonesia. and Vietnam. Romania. Portugal. Italy. Ireland. Regional block with the largest number of members states (27). Latvia. In terms of their size and trade value. and Total Trade US$1. and the United Kingdom. and other issues affecting the region.

and the United States of America Population of over 460. Mexico.2 million on 1 January 2010 (Eurostat). Uruguay. MERCOSUR (Mercado Comun del Cono Sul . . Associate members include Bolivia. NAFTA (North American Free Trade Agreement) NAFTA Agreement signed on 1 January 1994.774 trillion . and Peru. and Venezuela. Ecuador.Population estimated at 501. 4. interested in MERCOSUR MERCOSUL becoming a member of the region. Established on 26 March 1991 with the Treaty of Assunción. Chile. Colombia. has an observer status Population: More than 273 million people GDP (PPP) of more than US$2. similar levels of per capita GNP. Paraguay. GDP (PPP) estimated at US$14. Economist Jeffrey J.9 trillion 3. Scott of the Peterson Institute for International Economics notes that members of successful trade blocs usually share four common traits: 1.0 trillion ……………………………………………………………………………………………………. Full members include Argentina. Associate members have access to preferential trade but not to tariff benefits of full members.Southern Cone Common Market) Official site is available only in Spanish and Portuguese. Mexico.9 million GDP (PPP) US$17. Brazil. Members: Canada.

such as: 1. political commitment to regional organization. 2. 2. geographic proximity. preferential trading areas. trade blocs can fall into different categories.free trade areas. Preferential trading area . customs unions. common markets and 5. 1. similar or compatible trading regimes. 4. 3. and 4. . economic and monetary unions. Depending on the level of economic integration. 3.

PTA) is a trading bloc which gives preferential access to certain products from the participating countries. If they are competitive. This is done by reducing tariffs. namely that World Trade Organization (WTO) members should apply the same tariff to imports from other WTO members. as almost any PTA has a main goal of becoming a FTA in accordance with the General Agreement on Tariffs and Trade. The line between a PTA and a Free trade area (FTA) may be blurred. A PTA can be established through a trade pact. List of preferential trade areas  Asia-Pacific Trade Agreement (1976)[2]  Economic Cooperation Organization (ECO) (1992)  Generalized System of Preferences  Global System of Trade Preferences among Developing Countries (GSTP) (1989)  Latin American Integration Association (LAIA/ALADI) (1981)[3]  Melanesian Spearhead Group (MSG) (1994)  Protocol on Trade Negotiations (PTN) (1973)  South Asian Preferential Trade Arrangement (SAPTA) (1999)  South Pacific Regional Trade and Economic Cooperation Agreement(SPARTECA) (1981)[4] Free trade area Free trade area is a type of trade bloc. but not by abolishing them completely. Countries choose this kind of economic integration form if their economical structures are complementary. a designated group of countries that have agreed to eliminate tariffs. These tariff preferences have created numerous departures from the normal trade relations principle. It can be considered the second stage of economic integration. quotas and preferences on most (if not all) goods and services traded between them.A Preferential trade area (also Preferential trade agreement. they are more likely to choose customs union. List of multilateral free trade agreements  ASEAN Free Trade Area (AFTA)  Central American Integration System (SICA)  Central European Free Trade Agreement (CEFTA)[1]  Common Market for Eastern and Southern Africa (COMESA) . It is the first stage of economic integration.

but in some cases they use different import quotas.17 Southern African Customs Union (SACU) 1910[4] WT/REG231/3 Switzerland — Liechtenstein 1924 . The participant countries set up common external trade policy. Customs union is established through trade pact. Kazakhstan and 2010-07-1[2] Russia EU — Andorra 1991-7-1 WT/REG53/M/3 EU — San Marino 2002-4-1 EU — Turkey 1996-1-1 WT/REG22/M/4 Israel — Palestinian Authority 1994[3] Southern Common Market (MERCOSUR) 1991-11-29 WT/COMTD/1/Add.June 1957[2]  Gulf Cooperation Council (GCC)  North American Free Trade Agreement (NAFTA)[3]  Southern African Development Community (SADC)  South Asia Free Trade Agreement (SAFTA)[4]  Trans-Pacific Strategic Economic Partnership (TPP)[5 Customs union A customs union is a type of trade bloc which is composed of a free trade area with a common external tariff. List of customs unions Agreement Date (in force) Recent reference Andean Community (CAN) 1988-5-25 L/6737 East African Community (EAC) 2005-1-1[1] WT/COMTD/N/14 Customs Union of Belarus. Common competition policy is also helpful to avoid competition deficiency. It is the third stage of economic integration.  G-3 Free Trade Agreement (G-3)  Greater Arab Free Trade Area (GAFTA) . Purposes for establishing a customs union normally include increasing economic efficiency and establishing closer political and cultural ties between the member countries.

EMU is established through a currency-related trade pact. To remove these barriers the member states need political will and they have to formulate common economic policies.[1] The physical (borders). but not so advanced in reduction of the rest of the trade barriers.Agreement on Internal Trade (AIT)  European Free Trade Association (EFTA)  European Economic Area (EEA)  Switzerland . It is to be distinguished from a mere monetary union (e. and freedom of movement of the factors of production (capital and labour) and of enterprise and services. The European Economic Community was the first example of a both common and single market. and services between the members is as easy as within them. labour. and may be limited initially to a free trade area with relatively free movement of capital and of services. but it was an economic union since it had additionally a customs union. the Latin Monetary Union in the 19th century). . This is the fifth stage of economic integration.European Union[2 Economic and monetary union An economic and monetary union is a type of trade bloc which is composed of a economic union(common market and customs union) with a monetary union. List of single markets  Canada .Single market A single market is a type of trade bloc which is composed of a free trade area (for goods) with common policies on product regulation. A common market is a first stage towards a single market. which does not involve a common market. goods.g. The goal is that the movement of capital. technical (standards) and fiscal (taxes) barriers among the member states are removed to the maximum extent possible. These barriers obstruct the freedom of movement of the four factors of production.

List of economic and monetary unions  Economic and Monetary Union of the European Union (1999/2002) with the Euro for the Eurozonemembers of the European Union  de-facto Monaco .Eurozone[1]  de-facto the OECS Eastern Caribbean Currency Union with the East Caribbean dollar in the CSME(2006)[2]  de-facto Switzerland .Liechtenstein[3] …………………………………………………………………………………………………………………… .

especially as espoused by the WTO. Some analysts such as Preeg (1989) argue that trade blocs are desirable because they complement globalized trade. the fact is very few countries develop and reduce inequality via regional trade alone. ……………………………………………………………………………………………………… . but still smaller than the world market. “no overall consensus is likely to be reached in the foreseeable future…[and] preferential trading arrangements may or may not bring welfare gains for participating counties” (1994: 33). Furthermore. Although scholars such as O’Brien (1992) and Hopkinson (1992) argue that globalization may usher in the “end of geography”. which are larger than the domestic market of a given country. they note. redistribution of income and welfare” (1994: 32). Gibb and Michalak note. regionalism has emerged as an alternative form of trade that attempts to counter more aggressive policies of free trade. Regardless of the position taken on regionalism. This is primarily due to the size of the market: globalization taps into a world market whereas trade blocs emphasize into regional markets. However. Others view regionalism as a threat to free trade because trade blocs advocate and install protectionist policies that shield bloc members from the effects of free trade (Schott 1989). “the multilateral trading system is in decline and regionalism is on the ascendancy” (Gibb and Michalak 1994: 1). Gibb and Michalak remind us that “theoretical analysis based on liberal economic principles is…inconclusive in evaluating the impact of trading blocs on living standards.General debates on trade blocs The debates surrounding the feasibility of regionalism contain sharp disagreements.

(4) To promote South-to-South trade. (2) customs delays (establishing bureaucratic formalities that slow down the ability for the imported product from abroad to enter the domestic market. and between Latin American countries. e. …………………………………………………………………………………………………………………… . (5) To promote economic and technical cooperation among developing countries ……………………………………………………………………………………………………… They also use several measures to restrain global competition: (1) import quotas (limiting the amount of imports into the country so that domestic consumers buy products made by their countries in their region). (2) To establish tariffs that protect intra-regional trade from “outside” forces. (3) subsidies (government financial assistances toward sectors of the home economy so that they have an influx of capital). (4) boycotts and technical barriers.g. between Africa and Asia.. (5) bribes and voluntary restraints. (3) To promote regional security and political concerns or to develop trade in such as way as to enhance the security in the region.Trade blocs have a range of reasons to “protect” the trade interests of their region: (1) To establish some form of regional control regarding trade that fulfills the interests of nations within that region.

Bilateral free trade agreements List of agreements between two states.  ASEAN has bilateral agreements with the following countries and blocs: ASEAN Free trade agreements   ASEAN – Australia – New Zealand Free Trade Area (AANZFTA) is a free trade area  ASEAN–China Free Trade Area (ACFTA). in effect as of 1 January 2010  Caribbean Community (CARICOM) has bilateral agreements with the following countries and blocs:  Costa Rica  Cuba  Dominican Republic  EFTA [2] has bilateral agreements with the following countries and blocs: . in effect as of 1 January 2010  ASEAN–India Free Trade Area (AIFTA). two blocs or a bloc and a state.

EFTA Free trade agreements   Albania  Canada  Chile  Colombia  Croatia  Gulf Co-operation Council  Faroe Islands (autonomous entity of Denmark)  Egypt [3]  Israel  Jordan  Lebanon  Macedonia  Mexico  Morocco  Palestinian Authority  Serbia  Singapore  Southern African Customs Union [4]  Tunisia  Singapore  South Korea  Turkey  Ukraine  India has bilateral agreements with the following countries and blocs: .

Nepal. Pakistan. the Maldives.India Current Bilateral/Multilateral FTA's Proposed/Suspended Bilateral/Multilateral FTA's   SAFTA (Bangladesh. Sri Lanka and Afghanistan)  ASEAN (ASEAN–India Free Trade Area)[7]  European Union (final stage)[8]  Sri Lanka[9]  Singapore  Thailand (separate from FTA agreement with ASEAN)[10]  Malaysia (separate from FTA agreement with ASEAN)  Japan[11]  European Free Trade Association (EFTA) (negotiation ongoing)[12]  Canada (negotiation ongoing)  South Korea (India-Korea CEPA)  United States free trade agreements: . Bhutan.

awaiting ratification   Middle east (US . Nicaragua. and the Dominican Republic) .5 August 2004. Costa Rica. incl.[15] .The United States FTA in force FTA signed. Honduras. El Salvador. Guatemala.Middle East Free Trade Area initiative)  NAFTA (Canada and Mexico)  Australia  Chile  Singapore  Peru  Dominican Republic–Central America Free Trade Agreement(DR-CAFTA.

Trade in goods Trade China. Nepal Trade in goods Treaty of Trade AGREEMENT ON South Asian Free Trade Area (safta) . Bhutan Trade in goods India Agreement on Trade Commerce and Transit India. India. India. India. Agreement Republic of (APTA) Korea and Sri Lanka1 Bhutan. Trade in goods Maldives Maldives Trade Agreement Indo-Nepal India.…………………………………………………………………………………………………………………… India: Bilateral and Regional Trade Agreements Name of Member Scope the countries Agreement Asia Pacific Bangladesh.

India-Thailand Free Trade Agreement The FA for establishing an FTA between India and Thailand was signed in October 2003. and cooperation agreements in various sectors . Mutual Recognition Agreements29(MRA).Sri Lanka Free Trade Agreement (ISFTA) was signed in 1998 in New Delhi. India-Singapore Comprehensive Economic Cooperation Agreement The Comprehensive Economic Cooperation Agreement (CECA) between India and Singapore entered into force from August 2005 and is presently India's most ambitious FTA. Its economic arm. intellectual property and media. education. It became operational from 2000 and is a trade agreement in goods for the establishment of a free trade area by end of 2008 through elimination of tariffs in a phased manner. services and investment and provides for the phased elimination of tariffs aiming for a complete FTA by 2010.5 billion is the largest regional grouping in the world. Maldives. Under the EHS 82 common items of export interest have been agreed for complete elimination of tariff on a fast track basis and concessions were completed by September 2006. Presently intra-regional trade constitutes only five percent of the regions total international trade. e- commerce. excluding the items under the negative list of both countries (Items under the negative list are not given any concession). The first phase was an immediate tariff concession on the items under the positive list of both countries. was signed in January 2004 and has eight members: Bangladesh. Sri Lanka and Afghanistan. The second phase mandated a phased concession on the remaining exchanged items. ASEAN-India Regional Trade and Investment Agreement .customs. India-Sri Lanka Free Trade Agreement The India. Bhutan. an attempt at trade and investment liberalisation across the region. the Agreement on South Asian Free Trade Area (SAFTA). and an improved double taxation avoidance agreement. a bilateral agreement on investment protection and promotion. India. science and technology. The agreement covers trade in goods. Pakistan. The agreement became operational from September 2004 with the implementation of the Early Harvest Scheme (EHS). in Bangkok. Nepal. CECA comprises a free trade agreement in goods and services.The South Asian Association for Regional Cooperation (SAARC) with a population of 1.

Thailand and Vietnam. Germany. Singapore. Italy. Malta. Cyprus. The FA sets the frame for the negotiations. France. . Spain. In trade in goods both sides are interested in elimination of tariffs on substantially all trade. where both sides agreed on launching negotiations for a Trade and Investment Agreement that aims to deepen and widen trade and investment between India and the 27 members of the EU (Austria. Malaysia. services and investment. Hungary. Greece. India signed a FA on Comprehensive Economic Cooperation with the member States of the Association of South East Asian Nations (ASEAN). EU-India Trade and Investment Agreement In October 2006 the 7th EU-India Summit was held in Helsinki. Cambodia. Denmark. Netherlands. Sweden. Poland. Myanmar. Romania. Czech Republic. Bulgaria. Estonia. The agreement aims an ASEAN-India Regional Trade and Investment Area (RTIA) through free trade agreements in goods. in Bali. with a minimal coverage of 90% of the bilateral trade in volume and tariff lines. Slovakia. Finland. Lithuania. Latvia. Portugal. and United Kingdom). namely Brunei Darussalam. Indonesia.In October 2003. Philippines. Ireland. Luxembourg. Slovenia. Belgium. Laos.