![]() ![]() So what is a trading bloc?Ī Trading bloc is a group of countries that have reduced or removed trade barriers for its participants. One of the results of these factors is the formation of trading blocs. The strengthening of economic interdependence of countries as a result of international regional integration and globalization of foreign economic relations gives a powerful impetus to the development of economic systems at the state, regional and global levels. The diversity of integration models allows the majority of States, regardless of their position in the world, capacity and level of development to seek and find their place in these processes. These could be FTAs or it could even be joining new trade blocs, though it’s unlikely we would enter a similar arrangement to that we had with the EU.In the second half of the 20th century, as a result of the unprecedented strengthening of the economic life internationalization, two main trends that determine the modern development of the world economy - globalization and regional integration-were formed. Once the UK leaves the EU it will be free to negotiate new arrangements with new partners. The Eurozone within the EU is an example of an Economic Union but is not compulsory for all members. This can include things like taxation, interest rates, and currency. This goes even further than a Common Market and includes common economic policies. Common Markets include the reduction of restrictions on the movement of factors of production such as people and finance, as well as tariffs and quotas. This form of trade bloc removes tariff barriers for members but requires them to adopt common tariffs, quotas, and standards for third parties. Examples include the North American Free Trade Agreement (NAFTA) and the Comprehensive Agreement for Trans-Pacific Partnership (CPTPP). This arrangement enables members to trade without tariffs (or with reduced tariffs) but allows individual members to negotiate trade deals with third parties. There are different forms that a trade bloc can take, as follows: ![]() The disadvantage is that no single nation within the trade bloc is permitted to seek its own FTAs with third parties. The advantage of this is that the trade bloc will be attractive to third parties as a trade partner and this can help it secure favourable FTAs that benefit all members. The trade bloc negotiates FTAs as a single entity. ![]() ![]() To allow for smooth trade, many common standards are adopted across all nations in the trade bloc such as food and safety standards. It also reduces or removes restrictions on the movement of factors of production such as people and finance. What does a trade bloc mean for members?Ī trade bloc like the EU means that members can trade with each other without incurring tariffs on their goods. It means that all the nations within it can trade freely with each other and any nation within it can trade with third parties who have a Free Trade Agreement (FTA) with the trade bloc. So, what is a trade bloc and how will leaving one affect the UK?Ī trade bloc is a multilateral agreement between several nations. Trade blocs are something that we have heard a lot about since 2016 when the UK voted to leave the largest trade bloc in the world: the EU. What is a trade bloc in international trade? And what types of trade bloc are there? ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |