Trading blocs benefits and drawbacks

Benefits:

• FDI will increase as a result of trade blocs and benefits the economies of particpatign nations.
• Economies of scale- larger markets created through trade blocs permit economies of scale.
• Competition: trading blocs bring businesses in several countries closer together resulting in greater competition
• Increased trade: Reduced protectionist measures such as tariffs which should stimulate greater demand within the trade bloc
• Market efficiency: A more efficient makret due to competition, FDI…