tapesraka.blogg.se - Types of trade blocs

TYPES OF TRADE BLOCS FREE

TYPES OF TRADE BLOCS FREE

It is also significant in that it is the first free trade agreement between China, Japan, and South Korea, three of the four largest economies in Asia. It represents a collaborative market of more than 2.2 billion people, covering about 30 percent of global gross domestic product (GDP), worth $26.2 trillion and nearly a third of the world’s population. The countries comprising 10 ASEAN (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam) with five partner countries (Australia, China, Japan, Korea, and New Zealand) are the members of this agreement. Over a decade in the making, the RCEP was introduced at the Association of Southeast Asian Nations (ASEAN) summit that took place in Bali (Indonesia) in 2011.

Depending on the level of economic integration, trade blocs can be classified as preferential trading areas, free-trade areas, customs unions, common markets, or economic and monetary unions.The world’s biggest free trade deal, the Regional Comprehensive Economic Partnership (RCEP) came into force on January 1, 2022. Trade blocs can be stand-alone agreements between several states (such as the North American Free Trade Agreement) or part of a regional organization (such as the European Union). So, a trading bloc is a formal agreement between two or more regional countries that remove trade barriers between the countries in the agreement while keeping trade barriers for other countries. For example, the European Union is an economic union.

Economic Union – A common market that is taken further by agreeing to establish common economic policies on such things as taxation and interest rates and, even, a common currency.

For example, no permits are required to work in another member country.

Common Market – This is a customs union in which the members also agree to reduce restrictions on the movement of factors of production – such as people and finance – as well as reducing barriers to the sale of goods.

Customs Union – Countries that belong to customs unions agree to reduce or abolish trade barriers between themselves and agree to establish common tariffs and quotas with respect to outsiders.

For example, the North American Free Trade Agreement (NAFTA) between the USA, Canada & Mexico created a free trade area.

Free Trade Area – Members agree to reduce or abolish trade barriers such as tariffs and quotas between themselves.

Trading blocs are a form of economic integration, and increasingly shape the pattern of world trade.

It is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to international trade, are reduced or eliminated among the participating states, allowing them to trade with each other as easily as possible. A regional trading bloc is a group of countries within a geographical region that protect themselves from imports from non-members. It is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where barriers to trade (tariffs and others) are reduced or eliminated among the participating states. A trade bloc is an agreement between countries intended to reduce or remove barriers to trade within member countries.