Regional Trade Blocks at a Glance

The concept of trade blocks is crucial in the context of international trade. Trade blocks are free trade zones designed to encourage trade activities across nations. The formation of trade blocks involves a number of agreements on tariff, trade and tax. The activities of trade blocks have huge importance in the economic and political scenarios of the contemporary world. Over the years trading blocks have played a major role in regulating the trend and pattern of international trade.
Regional Trade Blocks at a Glance
Regional trade blocks protect the interests of the member countries. The primary aim of trade block activities is to create a favorable economic framework for promotion of cross border trade among the member countries. Different regional blocks have come up in the period of economic liberalization in various parts of the world. Some of the functionally active trading blocks are listed below:

NAFTA (North American Free Trade Agreement) EU (European Union) ASEAN (Association of Southeast Asian Nations) MERCOSUR (Mercado Comun del Cono Sur)

CEFTA (Central European Free Trade Agreement) GAFTA (Greater Arab Free Trade Area) SAARC (South Asian Association for Regional Cooperation) CEMAC (Economic and Monetary Community of Central Africa) East African Community (EAC) SACU (South African Customs Union) PARTA or PIF (Pacific Regional Trade Agreement) AEC (African Economic Community) CACM (Central American Common Market)

A particular country may be a member of more than one regional trading block. However, in order to do away with overlapping, such nations are normally put within the most dynamic trade block.

Activities of Trade Blocks

It is true that the principal objective of all trade blocks is promotion of trade; however the difference lies in their modes of operation. The activities of trade blocks can be evaluated by using three basic measures.

The number of latest agreements, meetings and other activities

undertaken by the regional trade blocks

The pattern of future planning regarding trade promotion and focus on

intergovernmental associations and quicker timeframe for policy implementation

Number of practical achievements attained by the member countries

In practice, the success of trading blocks crucially depends on the performance of the member countries. To ensure effective trade promotion the trading blocks need to be more flexible and accommodative. Besides trade promotion, the regional blocks are also expected to take part in other domains of the member countries. Effective management of trade block activities ensures all-round development of the member nations.

REGIONAL TRADE BLOCKS Companies need to adjust organizational structure and operating strategy to take advantage of regional trade groups. These are, 01. EU (European Union): The EU is become a most powerful trade block in the world. It has members of Austria, Belgium, Denmark, Finland, Germany, Greece, Ireland, Italy, Lather lands, Porchukcal, Spain, Sweden, and U.K. 02. NAFTA (North American Free Trade Agreement): 99% of the goods traded between Mexico, Canada, and the U.S. It is a large trading block but includes countries of different sizes and wealth. Additional provisions are: Workers right Dispute resolution mechanism

03. LAFTA (Latin American Free Trade Association): LAFTA and the Caribbean Free Trade Association (CARIFTA) changed their names to the Latin American Integration Association and Caribbean community and common market (CARICOM). It has U.S as their major export market. 04. ASEAN (Association of South East Asian Nations): It is organized in 1967and it has Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Jan 1, 1993 ASEAN officially formed the ASEAN Free Trade Area (AFTA).

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Its goal is to cut tariffs on all intra-zonal trade to a maximum of 5%. 05. APEC (Asia Pacific Economic Co-operation): It was formed in NOV 1989 to promote multilateral economic co-operation in trade and investment in the Pacific Rim. It is composed of 21 countries that border the Pacific Rim both Asia as well as the America. Its creating new opportunities for American business and creating new employment for American workers. 06. EFTA (European Free Trade Association): It was established in Jan 1960, EFTA currently joins 4 countries Norway, Iceland, Liechtenstein and Switzerland. Members are Austria, Finland, and Sweden joined on Jan 1, 1996. 07. SAARC (The South Asian Association for Regional Co-operation): The SAARC involving seven countries, namely India, Bangladesh, Pakistan, Nepal, Bhutan, Sri Lanka, and Maldives, was formally launched in Dec 1985. Objectives are: 1. 2. 3. To promote welfare of the people of South Asia. To accelerate economic growth. To strengthen co-operation with other developing countries.

08. SAPTA (The SAARC Preferential Trading Arrangement): The SAPTA has the members of India, Pakistan, Bangladesh, Nepal, Sri Lanka, Bhutan and Maldives. 1. 2. 3. 4. Overall reciprocity and mutually of advantages. Step by step negotiations and extension of preferential trade arrangement in stages. Inclusion of all types of products Raw, Semi-processed, Processed. Special and favorable treatment to Least Development Countries (LDCs).

09. Indo Lanka Free Trade Agreement:

According to the Bilateral Free Trade Area Agreement signed by India and Sri Lanka on 28th Dec 1998, a large number of items will be eligible for duty free trade. It has offered to permit as much as 1000 items on Zero duty from Sri Lanka and Sri Lanka will allow duty free imports of 900 items from India. Its Objectives are. 1. 2. 3. Expansion of trade the harmonious development of the economic relations between India and Sri Lanka. Removal of barriers to trade. Expansion of world trade.