A trading bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organisation, where regional barriers to international trade, (tariffs and non-tariff barriers) Trading blocs helps in elimination of tariff, and non-tariff barriers and facilitates free transfer of resources across the border of member countries. The world is increasingly divided into trade blocs, which play a central role in international trade negotiations.
Major Trade Blocs, There are four major trade blocs in current times that have the reputation and will to make a significant impact on international business process. Successful trading blocs share four characteristics, similar levels of per capita gross national product, geographical proximity, political commitment of the regional organization
Typically, trading blocs have their own administrative authorities and regulators. Some trading blocs also establish political goals. Trading blocs • Free trade areas (FTAs) • Customs unions • Common markets Higher level extension topics • Trade creation and trade diversion.
Trading Blocs. Trading blocs take many forms, depending on the degree of cooperation and interrelationships, which lead to different levels of integration among the participating countries. Trading blocs bring together countries and increase the conditions for imports. An economic union is a type of trade bloc that is constituted of a common market with a customs union.
There are four types of trading bloc such as preferential trade area, free trade area, customs union and common market. Here is the list of 10 major regional trade blocs across the world.
Trading blocs increasingly shape the pattern of world trade. A regional trading bloc is a group of countries within a geographical region that protect themselves from imports from non-members. Trading Blocs and Trade Creation. Trade creation is the movement from a higher cost source of output to a lower cost source of supply as a result of joining a trade agreement.