TRADING BOLCSPRESENTED BY

UTKARSH KANHERE

1. INTRODUCTION2. FEATURES OF TRADEING BLOCS3. REASONS FOR FORMATION OF BLOCS4. TYPES OF TRADE BLOCS5. EFFECTS OF TRADE BLOCS6. MAJOR TRADE BLOCS(EU.NAFTA, SAARC,)

CONTENTS

DEFINATION- A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.

Regional trade blocs promoted the trade with in blocs and defend it members against global competitions.

Regional trade blocs is group of country which protected them self from import and non members

INTRODUCTION

Reduction or elimination of barriers to trade Huge market to members Distribution cost is reduce. Increases the trade Regional market have better economy of

scales Economical , industrial, social development Employment creation.

Features of trade blocs

Emphasis on removal of trade barriers. Coordination and bargaining power. Trade gains Increased returns and increased

competition. Investments Security

Reasons for formation of blocs

Preferential trading agreements. Free trade area Customs unions Common unions Economic unions Political unions

Types of trading blocs

Political unions Group of nations with shared sovereignty or complete unification of nation

Economic unionsCommon market plus full economic policy harmonization Example - EU

Common market Custom union plus the free movement of goods services people and capital.EXAMPLE- (Comunidad Andina, CAN) ( BOLOVIA, PERU Colombia ,Ecuador)

Custom unionsFree trade area plus a common external tariffMERCOSUR

Free trade area Formal tariff free trading area between countries NAFTA

Preferential trading agreementsReduces tariff or special quotas allowing preferential accessTo market EXAMPLE - INDIA -SRILANKA

POSITIVE:- 1) Trade creation.2) Competitions.3) Economic growth 4) Economic developments5) Employment 6) Technological developments7) Investment8) Social cultural relation9) Utilization of resource10) Consumer welfares

Effects of trade blocs

Negative effects:- 1) Loss sovereignty 2) Interdependence3) Distortion of trades4) loss to developing nations5) Loss of benefits

EU ( European union). NAFTA( north American free trade

agreements) ASEAN ( Association of South East Asian

nation) SAARC ( South Asian association for

regional cooperation) SAFTA ( South Asian free trade

agreements)

Major trade blocs

Introduction - Headquarters: Brussels, Belgium

Region(s): EuropeFounding Document: Agreement TextCoverage: Goods & ServicesDate Signed: February 7, 1992Entry Into Force: November 1, 1993

Population – 507,416,607 Statistical data :- 1) Balance of payments - current account net of trade groups

(millions of dollars)$158,939 (2012)2) Trade group exports (millions of dollars)$5,803,284 (2012)3)Trade group imports (millions of dollars)$5,841,878 (2012)4) Total GDP in 2014 PPP $18.124 Trillions.5) Currency is “euro” and HDI .876

1) EUROPEAN UNION

Role and achievements of EU1. elimination of customs2. Common currency3. Common markets4. Reduces the obstacles for movements of

persons ,services, capital among members.5. Formulation of common policy in the area

of transportation, agricultural. 6. Established European investment banks.7. Strong presence of world.

The EU as a bloc of 28 countries is India’s largest trading partner total import $450199 millions and export $300400 milions.2013 14

In low cost raw material supply , service outsourcing, and HR EU are most depend on Indian.

The EU is also one of the largest sources of Foreign Direct Investment for India.

As envisaged in the Joint Action Plan, a Joint Working Group on Environment dealing with prevention of pollution, waste minimization, protection of biological diversity,sustainable Forest management, environnemental éducation, etc.

Relation of EU with India

North American free trade agreements Number of Member Countries: 3

Headquarters: Ottawa, Canada; Mexico City, Mexico; Washington D.C., United StatesRegion(s): North AmericaFounding Document: Agreement Text Composition: TrilateralCoverage: Goods & ServicesDate Signed: December 17, 1992Entry Into Force: January 1, 1994

Populations - 471,964,016 Statistical data – 1)Trade group exports (millions of dollars)$2,371,330 (2012)2)Trade group imports (millions of dollars)$3,190,934 (2012)3) GDP as per PPP $20.162 trillions4) Balance of payments - current account net of trade groups

(millions of dollars)($548,641,000,000) (2012)5) HDI 0.868

NAFTA

Role and achievements– 1. crates new business opportunity2. Competitive advantage of companies

operating in member nation3. Create good Political relation 4. Increase the investment 5. Provides dispute settlement agency6. Protection and enforcement of intellectual

property7. Increase service sectors opportunity

Indian total export with NAFTA is $43406.33 millions. In 2013-2014

Indian total Import with NAFTA is $29,325.77 in 2013-14 as per commerce departments

USA is one of the major import and export partner of India.

North American country like USA, Canada are biggest investor in Indian economy by direct and indirect investment.

India also one of the sources of HR in NAFTA.

Relation of NAFTA WITH INDIA

SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION

Number of Member Countries: 8 Headquarters: Kathmandu ,NEPAL Region(s): south AsianCoverage: Goods & Services

ESTABLISHMENT - 8 DECEMBER 1985 Statistical data - 1)total export $354617 millions 2012-132) Total import $ 60 2013 millions 2012-133) GDP 24% $1603.8 BILLIONS Population - 1,622,557,600

SAARC

Role and achievements –1. promote the welfare of people of south Asian2. Accelerates economic growth 3. Social and cultural opportunity developments 4. Investments generations5. Elimination of trade tariff 6. Collective growth and developments7. Industrial and service research and

developments8. Unity among members countries regarding

the issue of common interest in international forums

India is largest export import partner of SAARC nation.

Indian total import & export in 2013-14 with SAARC Nations are$ 17503.88 millions and $2472.98 millions.

There demography similarity and richness of natural resources SAARC Nations are interdependent.

Indian are one of the biggest investor in Nepal, Bhutan, Afghanistan.

Relation of SAARC WITH INDIA

ANY Quires?