Trading Blocs


What it is and different ones

-Groups of countries situated in the same region that join together and enjoy trade free of tariffs and another form of trade barrier

  • Preferential trading are (PTA): Members agree to remove trade barriers on a rang of goods and services but some restrictions still exist
  • Free trade area (FTA): Completely free of trade barriers but members are allowed to impose trade restrictions on non-members
  • Custom Unions: Similar to FTA but members impose a common set of trade barriers on non-members
  • Common markets: Like custom unions but allow the free movement of labour and capital between member countries. Same trading standards and regulations
  • Economic unions: Most developed. Adopt the arrangements of common markets and customs unions but also aim for even more integration
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Advantages on member states

  • Same benefits to free trade
  • Goods will be cheaper and more consumer choice and faster economic growth.
  • Firms will exploit economies of scale because they have access to larger markets and extra competition because they have larger markets
  • Formation invites FDI
  • Closer cooperation between members
  • Can reduce cross-border conflict, promote peace,and achieve substantial social and economic gains
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  • Financial cost to the gov and therefore the taxpayer
  • Firms within a trading bloc to merge and become too powerful. Forming regional monopolies that might exploit consumers in the bloc. Certain countries get more out of membership
  • Countries may start to rely too heavily on trade within the bloc. Making them more vulnerable to changes in prices and demand patterns. May miss out from opportunities in other world markets
  • Inefficiet producers may be protected from competition from businesses outside the trade bloc. Consumers may end up paying more.
  • May start to standardise trading practices, laws and other customs may threaten a nation's culture.

Impact on Non-Member States

  • They will face common trade barriers when selling goods to any members.
  • Be at a disadvantage and may be forced to find new markets
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North American Free Trade Agreement

  • Made up of three countries: the USA, Canada and Mexico
  • Biggest trading bloc in the world
  • Helped trade between the 3 members to grow from US$297 mill to $1.14 trillion
  • Helped raise EG, profits and jobs for all 3 countries


Led to the loss of 500,000-750,000, mostly in manufacturing

Job migration reduced or held down wages.

Put Mexican farmers out of business because it allowed cheap, heavily subsidised US farm products into Mexico

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Association of Southeast Asia Nations

  • 10 members from the Southeast Asian region
  • Some large members are Thailand, Vietnam, Malaysiaa, Indonesia, the Philippines and Singapore

Key aims

  • Accelerate eg, Social progress and cultural development in the region
  • Promote regional peace and stability through respect for justice and the rule of law
  • Promote cooperation on matters of common interest in the economic, social, cultural, technical, scientific and administrative fields
  • Help each other in the provision of training and research facilities
  • Increase cooperation so that regional improvements in agriculture, industry, trade, transport and communication can lift living standards
  • Promote Southeast Asia studies
  • Maintain close cooperation with other international and regional organisations
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South African Customs Union

  • Formed in 1910 and is the world's oldest trading bloc
  • Members include Botswana, Lesotho, Namibia, Swaziland and South Africa
  • Applies common customs and excise duties on goods imported from non-member countries
  • Also impose extra duties on agricultural produce
  • Trade is free of barriers
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Trading is one of the best ways to invest time.


Onko ketään jolla on kokemusta kaupankäynnistä ja joka voisi antaa minulle valmennusta? Haluan tietää kaupankäynnistä. Tällä hetkellä pelaan osoitteessa ja etsin lisää kasinovaihtoehtoja. Haluaisin kuulla teidän näkemyksiänne tästä. Haluan ansaita paljon rahaa kasinon aikana.

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