Regional Economic Integration Blocs Free Trade Association#

Regional Economic Integration Blocs Free Trade Association

It is also the European Free Trade Association (EFTA)вЂ™s largest trading partner, as 70% of imported merchandise in EFTA countries comes from the EU. Economic Integration and Trading BlocsThe European Union (EU) is the worldвЂ™s largest trading bloc and the second largest economy in the world. The list does not reflect any political opinion of the authors.The consequence of this economic integration was the emergence of three major regional trading blocs in North America, Asia, and Europe and several smaller, regional trading blocs primarily dispersed throughout Latin America and Africa. 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 When creating this list, we intended to display here those ten regional trading blocs with trade arrangements that have the biggest impact in world trade and the economic development of the region. Trade blocs can be stand-alone agreements between several states or part of a regional organization.

However, they are required to abide by certain horizonal and flanking policies. They can also attain equal rights and obligations within the Internal Market without having to adopt certain EU policiesвЂ“such as common agriculture and fisheries policies customs union common trade policy common foreign and security policy justice and home affairs harmonized taxation and the economic and monetary union. By cooperating and signing the EEA agreement, these three EFTA states are able to be part of the EUвЂ™s single market and benefit from free trade with the EU without having to apply for EU membership. This bloc is therefore primarily concerned with upholding the four fundamental pillars of the single market which are, the free movement of goods, people, services, and capital. This agreement creates the Internal Market, which integrates the 27 EU member states and three of the EFTA statesвЂ“namely Iceland, Liechtenstein, and NorwayвЂ“into one single market.

It is also one of the worldвЂ™s leading economic blocs and the fifth largest economy. The Mercado Comun del Cono Sur or Southern Common Market (MERCOSUR)The MERCOSUR is one of the worldвЂ™s fastest growing trading blocs with its four founding members generating 70% of South AmericaвЂ™s GNP. As of 1 January 2008, all tariffs and quotas were removed on US exports to Mexico and Canada thereby making Canada and Mexico as the first and third largest merchandise trading partners for the US from 2008 to 2014. Among the three members, the US is the largest trading country. The NAFTA also has two supplements: the North American Agreement on Environmental Cooperation (NAAEC) and the North American Agreement on Labor Cooperation (NAALC) these supplemental agreements aim to handle labor and environmental issues in the member states.

As of 2019, MERCOSURвЂ™s top external trading partners are China, the EU, the US, Chile, and Mexico.The AEC plays a central role in Asian economic integration, as it was the third largest economy in Asia and the worldвЂ™s sixth largest economy in 2019. This bloc also has Chile, Colombia, Ecuador, Guyana, Peru, and Surinam as associate members who can only do preferential trade they are not allowed to have tariff benefits. However, VenezuelaвЂ™s membership was suspended since 2016 due to its failure to comply with MERCOSURвЂ™s democratic principles. Aside from its four founding countries, Venezuela and Bolivia have also joined this tariff union in 20, respectively. This bloc aims to accelerate sustained economic development based on social justice, environmental protection, and poverty reduction.

Singapore is the most outstanding member state due to its strong economy. The AECвЂ™s member states include Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. For this aim, this economic community strives to achieve its Blueprint 2025, which envisions to make the region highly competitive and fully integrated into the global economy with equitable economic development.

It was formed on 8 December 1994 as a replacement of the former Preferential Trade Area (PTA) which was established in 1981. The Common Market of Eastern and Southern Africa (COMESA)The COMESA is the largest regional economic organization in Africa. Its external key partners in 2019 were China, the US, EU, Japan, and South Korea.

Due to this number of member states and its population of over 540 million people, the COMESA forms a major market for internal and external trade with a global trade in goods worth USD 235 billion. This economic union consists of 21 countries in southern and eastern AfricaвЂ“namely Burundi, Comoros, Democratic Republic of the Congo, Djibouti, Egypt, Eritrea, Ethiopia, Kenya, Libya, Madagascar, Malawi, Mauritius, Rwanda, Seychelles, Somalia, Sudan, Swaziland, Tunisia, Uganda, Zambia, and Zimbabwe. In light of this objective, the COMESA promotes regional integration consequently establishing a free trade area and launching a customs union in 2009. This economic cooperation among the COMESA member states is aimed to promote peace and security for the people in the region.

The member countries cooperate in the areas of human resource development and tourism agriculture and rural development environment, natural disasters and biotechnology economics, trade, and finance social affairs information and poverty alleviation energy, transport, science and technology and education, security and culture and others. Afghanistan later joined in 2007. The SAARC, an organization of South Asian countries, was founded on 8 December 1985 by Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.

The Indian Ocean Rim Association (IORA)Due to its rich natural resources, central location at the crossroads of global oil trade, and fast-growing economies, the Indian Ocean region plays a significant role in the global economy and international trade. Among the member states of this bloc, India is the largest trader. The SAPTA aims to promote trade among the member countries, while the latter aims to encourage free trade of goodsвЂ“excluding all services such as information technologyвЂ“between the SAARC countries. With this objective, the SAARC has established the South Asia Preferential Trading Agreement (SAPTA) in 1995 and the South Asia Free Trade Agreement (SAFTA) in 2016.