Discuss the economic motivations for the group of countries in the trading bloc to form

an agreement.

A regional trading bloc is a group of countries within a geographical region that protect
themselves from imports from non-members. Trading blocs are a form of economic
integration and increasingly shape the pattern of world trade. Trading bloc examples
include the NAFTA; APEC; COMESA; MERCOSUR and ASEAN. NAFTA became law
on January 01, 1994 with united Sates, Canada and Mexico as its participants. They
eliminate most tariffs between the member countries. NAFTA was the first who
developed nations signed a trade agreement with an emerging market country. Through
NAFTA, the three signatories agreed to remove barriers between them by eliminating
tariffs, barriers to agricultural, manufacturing, and services; to remove investment
restrictions and to protect intellectual property rights. NAFTA accomplished six things
for the participating countries. First, NAFTA granted most favored nation status to all co-
signer. That means watch country treated the other two fairly and couldn’t give better
treatment to domestic investors than foreign ones. They also couldn’t offer a better deal
to investors from non-NAFTA countries and they had to offer contract to business in all
the NAFTA countries.