What are some regional trading blocs? What factors contribute to the formation of Trading Blocs? How would you evaluate the attendant benefits and detriments of trading blocs?
Establishment of regional blocs like ASEAN, NAFTA have enabled countries to cooperate more with each other, take advantage of each other's strengths, and promote international trade volumes. Technology transfers between countries have enabled countries to enforce standards like ISO: 9000 etc. Policies like carbon credits, which are being used by countries worldwide to benefit by decreasing pollution, is being made possible by bilateral trade agreements between countries.
Example of NAFTA
NAFTA is a comprehensive agreement to liberalize trade in goods and services, remove barriers to investment, strengthen the protection of intellectual property rights; and establish a framework for further trilateral cooperation. The major provisions can be summarized in terms of two broad principles that cover virtually every aspect of trade among its three members:
Non-discriminatory treatment and transparency provide the certainty and predictability that are a prerequisite of any significant expansion of business.
The member countries of the North American Free Trade Agreement (NAFTA) form the world's largest trading bloc, with a gross domestic product (GDP) of US$11.4 trillion, or one third of the world's total GDP.
The benefits of NAFTA are:
1) The member countries of the North American Free Trade Agreement (NAFTA) form the world's largest trading bloc, with a gross domestic product (GDP) of US$11.4 trillion, or one third of the world's total GDP. (Wikipedia) Thus it has led to the greater economic growth and access to wider markets. Riordan will have a great access to the wider markets of Canada and Mexico.
2) Elimination of tariff
The achievement of the NAFTA is the permanent elimination of all tariffs among ...
This explains the Regional trading blocs