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Trade bloc

A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.[1]

Contents


Description

agreement]] that it participates into.)

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871. Surges of trade bloc formation were seen in the 1960s and 1970s, as well as in the 1990s after the collapse of Communism. By 1997, more than 50% of all world commerce was conducted under the auspices of regional trade blocs.[2]

Economist Jeffrey J. Scott of the Peterson Institute for International Economics notes that members of successful trade blocs usually share four common traits: similar levels of per capita GNP, geographic proximity, similar or compatible trading regimes, and political commitment to regional organization.[3]

Advocates of worldwide free trade are generally opposed to trading blocs, which, they argue, encourage regional as opposed to global free trade.[4] Scholars and economists continue to debate whether regional trade blocs are leading to a more fragmented world economy or encouraging the extension of the existing global multilateral trading system.[5][6]

Trade blocs can be stand-alone agreements between several states (such as the North American Free Trade Agreement (NAFTA) or part of a regional organization (such as the European Union). Depending on the level of economic integration, trade blocs can fall into different categories, such as:[7] preferential trading areas, free trade areas, customs unions, common markets and economic and monetary unions.

Lists of trade blocs

Customs unions worldwide.
Customs unions worldwide.
trade blocs]]:

Statistics of trade blocs

Trade bloc Population Gross domestic product Members
2006 2007 growth per capita
Common markets, Economic and Monetary unions
EMU 324,879,195 10,685,946,928,310 12,225,304,229,686 14.41% 37,630
OECS 593,905 3,752,679,562 3,998,281,731 6.54% 6,732
OII 504,476 12,264,278,329 14,165,953,200 15.51% 28,081
CCCM 6,418,417 39,616,485,623 43,967,600,765 10.98% 6,850
EEA 499,620,521 14,924,076,504,592 17,186,876,431,709 15.16% 34,400
Customs and monetary unions
CEMAC 39,278,645 51,265,460,685 58,519,380,755 14.15% 1,490
UEMOA 90,299,945 50,395,629,494 58,453,871,283 15.99% 647
Customs unions
CAN 96,924,486 281,269,141,372 334,172,968,648 18.81% 3,448
EAC 127,107,838 49,882,030,443 61,345,180,041 22.98% 483
EUCU 574,602,745 15,331,827,900,202 17,679,376,474,719 15.31% 30,768
GCC 36,154,528 724,460,151,595 802,641,302,477 10.79% 22,200
MERCOSUR 271,304,946 1,517,510,000,000 1,886,817,000,000 12.44% 9,757
SACU 58,000,000 1,499,811,549,187 1,848,337,158,281 23.24% 6,885
Preferential trade areas and Free trade areas
AANZFTA-ASEAN+3 2,085,858,841 10,216,029,899,764 11,323,947,181,804 10.84% 5,429
ALADI 499,807,662 2,823,198,095,131 3,292,088,771,480 16.61% 6,587
AFTZ 553,915,405 643,541,709,413 739,927,625,273 14.98% 1,336
APTA 2,714,464,027 4,868,614,302,744 5,828,692,637,764 19.72% 2,147
CARIFORUM-EUCU-OCTs 592,083,950 15,437,771,092,522 17,798,283,524,961 15.29% 30,060
CACM 37,388,063 87,209,524,889 97,718,800,794 12.05% 2,614
CEFTA 27,968,711 110,263,802,023 135,404,501,031 22.80% 4,841
CISFTA 272,897,834 1,271,909,586,018 1,661,429,920,721 30.62% 6,088
DR-CAFTA-US 356,964,477 13,345,469,865,037 14,008,686,684,089 4.97% 39,244
ECOWAS 283,096,250 215,999,071,943 255,784,634,128 18.42% 904
EFTA-SACU 68,199,991 1,021,509,931,918 1,139,385,636,888 11.54% 16,707
EAEC 207,033,990 1,125,634,333,117 1,465,256,182,498 30.17% 7,077
NAFTA 449,227,672 15,337,094,304,218 16,189,097,801,318 5.56% 36,038
TPP 25,639,622 401,810,366,865 468,101,167,294 16.50% 18,257
SAARC 1,567,187,373 1,162,684,650,544 1,428,392,756,312 22.85% 911
SPARTECA 35,079,659 918,557,785,031 1,102,745,750,172 20.05% 31,435
This list is based on the data obtained from  Statistics Division.

Comparison between regional trade blocs

Activities
Regional bloc Free Trade Area Economic and monetary union Free Travel Political pact Defence pact Other
Customs Union Single Market Currency Union Visa-free Border-less
EU in force in force7 in force2 in force 1 in force in force
(Schengen 1, 7 and CTA 1)
in force in force
(NATO 1, 7 and CFSP/ESDP 1)
ESA 1, 7
EFTA in force in force2, 7 in force in force 1, 7 in force 1, 7 ESA 1, 7
CARICOM in force in force in force 1 in force 1 and
proposed common
in force 1 proposed proposed NWFZ
AU ECOWAS in force 1, 3 in force 1 proposed[8][9] in force 1 and
proposed for 2012 1 and
proposed common
in force 1 proposed proposed in force NWFZ1
ECCAS in force1 in force1 proposed in force1 in force in force NWFZ1
EAC in force in force proposed for 2015 proposed for 2012 proposed ? proposed for 2015 NWFZ1
SADC in force1 in force1 proposed for 2015 de-facto in force 1 and proposed common for 2016 proposed[10] NWFZ1
COMESA in force1 proposed for 2010 ? proposed for 2018 NWFZ1
Common proposed for 2019 proposed for 2019 proposed for 2023 proposed for 2028 proposed for 2028 NWFZ1
EurAsEC in force1 in force1 proposed for 20121 Proposed[11] in force[12] in force 1
ASEAN in force 5 proposed for 2015[13] proposed 8[14] in force[15] proposed for 2015[16] proposed for 2020[17] NWFZ
CAIS in force1 proposed ? in force1 in force1 proposed NWFZ
CEFTA in force RCC7
NAFTA in force in force 1, 7
SAARC in force 1, 6
PIF proposed for 20211 NWFZ1

1 not all members participating yet
2 involving goods, services, telecommunications, transport (full liberalisation of railways from 2012), energy (full liberalisation from 2007)
3 telecommunications, transport and energy - proposed
4 sensitive goods to be covered from 2019
5 least developed members to join from 2012
6 least developed members to join from 2017
7 Additionally some non member states also participate (the European Union, EFTA and NATO have overlapping membership and various common initiatives regarding the European integration).
8 Additionally some non member states also participate (ASEAN Plus Three)

See also

Notes

Bibliography

  • Mansfield, Edward D. and Helen V. Milner, "The New Wave of Regionalism" in
  • Milner, Helen V., "International Trade" in

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