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On Trading Blocs

The document discusses various international trading blocks including: 1) The European Union (EU) which aims to establish a common market and closer political and economic cooperation between member states. 2) The Association of Southeast Asian Nations (ASEAN) which was established in 1967 and aims to establish a common effective preferential tariffs plan to encourage foreign investment and free trade. 3) The North American Free Trade Agreement (NAFTA) which came into effect in 1994 and created a duty-free market between Canada, Mexico, and the United States to liberalize trade and investment.

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Parul Kiledar
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4K views

On Trading Blocs

The document discusses various international trading blocks including: 1) The European Union (EU) which aims to establish a common market and closer political and economic cooperation between member states. 2) The Association of Southeast Asian Nations (ASEAN) which was established in 1967 and aims to establish a common effective preferential tariffs plan to encourage foreign investment and free trade. 3) The North American Free Trade Agreement (NAFTA) which came into effect in 1994 and created a duty-free market between Canada, Mexico, and the United States to liberalize trade and investment.

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Parul Kiledar
Copyright
© Attribution Non-Commercial (BY-NC)
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Download as PPTX, PDF, TXT or read online on Scribd
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PIONEER INSTITUTE OF

PROFESSIONAL STUDIES

ASSIGNMENT OF BUSINESS AND


ECONOMIC ENVIRONMENT

SUBMITTED TO- SUBMITTED BY-


PROF. ANSHU THAKUR PARUL SINGH THAKUR
MBA I SEM
SECTION-D
INTERNATIONAL
TRADING BLOCKS
DEFINITION:-
Regional trade blocks are intergovernmental
associations that manage and promote trade
activities for specific regions of the world They
have political as well as political implications
for example the European union , the worlds
largest trading block has harbored political
ambitions. The Maastricht treaty which gave
birth to EU calls for joint policies in regard to
military , defense, and citizenship
MAJOR TRADE BLOCKS

1) EUROPEAN UNION (EU)


2) NORTH AMERICAN FREE TRADE AGREEMENT (NAFTA)
3)SINGAPORE –AMERICAN FREE TRADE AGREEMENT(SAFTA)
4) ORGANISATION OF PETROLEUM EXPORTING COUNTRIES
(OPEC)
5) ASSOCIATION OF SOUTH EAST ASIAN NATION (ASEAN)
6) SOUTH ASIAN ASSOCIATION OF REGIONAL CO-OPERATION
(SAARC)
DEBATE ON TRADING BLOCKS

THERE ARE TWO VIEWS :


1)ANALYST LIKE PREEG ARGUE THAT TRADE BLOCS
ARE DESIRABLE BECAUSE THEY COMPLIMENT
GLOBAL TRADE.
2)OTHER ANALYST ARGUE THAT TRADE BLOCS ARE
NOT DESIRABLE BECAUSE THEY ARE THREAT TO
FREE TRADE AND NEED TO PROTECTIONISM
WHY TRADE BLOCS ARE
DESIRABLE
TRADE BLOCS COMPLIMENT GLOBAL TRADE
THEY PROTECT INTRA REGIONAL TRADE
FORM OUTSIDE FORCES.
THEY ESTABLISH REGIONAL SECURITY.
WHY TRADE BLOCS ARE
UNDESIRABLE
IMPORT QUOTAS(LIMITING THE AMOUNT OF
IMPORTS INTO THE COUNTRY SO THAT
DOMESTIC CONSUMERS BUY PRODUCTS MADE BY
THEIR COUNTRIES IN THEIR REGION).
CUSTOM DELAYS (ESTABLISHING BUREAUCRATIC
FORMALITIES THAT SLOW DOWN TRADE FROM
THE OTHER REGION)
SUBSIDIES BARRIER (GIVING HEAVY SUBSIDIES TO
PROTECT REGIONAL TRADE )
VOLUNTRY BOYCOTTS AND TECHNICAL
European Union Objectives:-

 Setting up a common market


 Continuous & balanced expansion
 Closer relations between the member states.
ACTIVITIES OF EU:-
Elimination of custom duties, quantitative restrictions with
regard to export & imports.
 Establishment of a common custom tariff & commercial
policy.
 Abolition of all obstacles for movement of persons, services &
capital.
 Application of programmes in order to coordinate the
economic policies.
ASEAN
Established in 1992
Total six members- Singapore, Brunei, Malaysia, Philippines,
Thailand & Indonesia.
To establish a common effective preferential tariffs (CEPT)
plan.
The CEPT allows for tariffs cut ranging from 0.50% to 20.00%
beginning with 15 products.
In 1994, ASEAN countries formed AFTA in order to develop
inter ASEAN trade.
Objectives of AFTA
To encourage inflow of foreign investment into this
region.
To establish free trade area in the member countries.
To reduce tariff of the products produced in ASEAN
countries (40% value addition in the ASEAN countries
to the product value is treated as manufactured in
ASEAN countries).
NAFTA
Initially bilateral trade between Canada & U.S.
NAFTA went into effect in 1994 after the joining of
Mexico.
U.S.- Canada trade is the largest bilateral trade in the
world.
The U.S. 1st Mexico’s & Canada largest trading partner.
 NAFTA is a powerful trading bloc with a combined
population and GNP greater than 15 member EU.
Provisions of NAFTA
Duty-free market access.
Trade rules- safeguard, subsidies, countervailing &
antidumping duties, health & safety standards.
Rules on trade in services & investment.
Protection of intellectual property.
Dispute settlement mechanism.
SAPTA
The council of ministers have signed the SAARC
preferential trading arrangement agreement on April 11,
1993.
Objectives of SAPTA
To gradually liberalize the trade among members of
SAARC.
To eliminate trade barriers among SAARC countries &
reduce or eliminate tariffs.
To promote and sustain mutual trade & economic
cooperation among member countries.
SAARC
Established in August 1983. • Members- India,
Bangladesh, Bhutan, Pakistan, Srilanka The
Maldives & Afghanistan.
Objectives of SAARC
To improve the quality of life & welfare of the people of the
member countries.
To develop the region economically, socially & culturally
 To provide the opportunity to the people of the region to live in
dignity & to exploit their potentialities.
To enhance the mutual assistance among member countries in
the areas of economic, social, cultural, scientific & technical
field.
To enhance cooperation to other trade blocs.
THANK YOU

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