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TRADE BLOCKS AND FREE TRADE AGREEMENTS PRESENTED BY: Deepika Pandey Divya Gadeock Tarun Khurana

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Page 1: Project Trade Blocs

TRADE BLOCKS AND FREE TRADE AGREEMENTS

PRESENTED BY:Deepika PandeyDivya GadeockTarun Khurana

Page 2: Project Trade Blocs

Trade Blocs

DEFINITION

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.

Page 3: Project Trade Blocs

TYPES OF TRADE BLOCs

Economic and

monetary union

Common markets

Custom Unions

Free Trade Areas

Page 4: Project Trade Blocs

List of Trade Blocs

•CEMAC – Economic and Monetary Community of Central America•EMU – Economic and Monetary Union of European Union•OECS – Organization of Eastern Caribbean States•OII – Overseas Issuing Institute •UEMOA – West African Economic and Monetary Union

Economic and

monetary union

•CACM – Central American Common Market•CAN – Andean Community•CCCM – Caribbean Community and Common Market•EEA – European Economic Area

Common markets

Page 5: Project Trade Blocs

List of Trade Blocs

• EAC – East African Community• EAEC – East Asian Economic Caucus• EUCU – European Union Customs

Union• GCC – Gulf Cooperation Council

Custom unions

• SAARC – South Asian Association for Regional Cooperation

• APTA – Asia Pacific Trade Agreement• ASEAN – Association of Southeast Asian

Nation• P4 – Trans-Pacific Strategic Economic

Partnership• NAFTA – North American Free Trade

Agreement

Free Trade Areas

Page 6: Project Trade Blocs

OPEC The Organization of the Petroleum Exporting Countries (OPEC) is a

permanent, intergovernmental Organization, created at the BAGHDAD CONFERENCE on September 10–14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. The five Founding Members were later joined by nine other Members:

Qatar Indonesia Socialist Peoples Libyan Arab Jamahiriya United Arab Emirates Algeria Nigeria Ecuador Angola Gabon

Page 7: Project Trade Blocs

OPEC

HEADQUARTERS : Vienna

OBJECTIVE: To co-ordinate and unify petroleum policies among

Member Countries, in order to secure fair and stable prices for petroleum producers

An efficient, economic and regular supply of petroleum to consuming nations

To ensure a fair return on capital to those investing in the industry.

Page 8: Project Trade Blocs

Functions of OPEC Review the status of the international oil market and the

forecasts for the future in order to agree upon appropriate actions which will promote Price stability in the oil market.

Decisions about matching oil production to expected demand are taken at the Meeting of the OPEC Conference.

Provides research and administrative support to the Secretariat body who disseminates news and information to the World at large.

Page 9: Project Trade Blocs

European committee (EC) The European Economic Community (EEC) (also referred to European

Community, or the Common Market) was an international organization that existed between 1958 and 1993 which was created to bring about economic integration (including a single market) between Belgium, France, Germany, Italy, Luxembourg and the Netherlands.

OBJECTIVES : To ensure the economic and social progress of their countries by

common action to eliminate the barriers which divide Europe Recognizing that the removal of existing obstacles calls for

concerted action in order to guarantee steady expansion, balanced trade and fair competition

Page 10: Project Trade Blocs

European committee (EC) To strengthen the unity of their economies and to ensure

their harmonious development by reducing the differences existing between the various regions and the backwardness of the less-favored regions

Intending to confirm the solidarity which binds Europe and the overseas countries and desiring to ensure the development of their prosperity

Resolved by thus pooling their resources to preserve and strengthen peace and liberty

Page 11: Project Trade Blocs

NAFTA NAFTA is an agreement signed by the governments of the United

States, Canada, and Mexico creating a trilateral trade bloc in North America. The agreement came into force on January 1, 1994.

In terms of combined purchasing power parity GDP of its members, as of 2007[update] the trade block is the largest in the world.

This agreement will remove most barriers to trade and investment among the United States, Canada, and Mexico.

Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years.  This allowed for an orderly adjustment to free trade with Mexico, with full implementation beginning January 1, 2008. 

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NAFTA

Benefits of NAFTA

Increase in Trade

Increase in U.S. Agricultural

Exports

Increase in Trade of Services

Increase in Foreign Direct

Investment

Page 13: Project Trade Blocs

UNCTAD Established in 1964, UNCTAD promotes the development-friendly

integration of developing countries into the world economy.

UNCTAD has progressively evolved into an authoritative knowledge-based institution whose work aims to help shape current policy debates and thinking on development, with a particular focus on ensuring that domestic policies and international action are mutually supportive in bringing about sustainable development.

The organization works to fulfill this mandate by carrying out three key functions: Forum for intergovernmental deliberations Research, policy analysis and data collection Technical assistance

Page 14: Project Trade Blocs

UNCTAD

Brief overview of activities:

Trade and commoditie

s

Macroeconomic policies, debt and

development financing

Investment and enterprise development

Africa, least developed countries, landlocked

developing countries & small island developing

States

Technology and

Logistics

Page 15: Project Trade Blocs

Free Trade AgreementDefinition Sovereign nations join together, usually on a

regional scale, to create free trade agreements.

Purpose Free trade agreements are created to lower

trade barriers and to stimulate trade between member countries. Member countries belonging to the free trade area trade freely with each other while maintaining trade barriers and tariffs for non-member countries.

Page 16: Project Trade Blocs

List of Free trade agreements

•Asia-Pacific Trade Agreement (APTA)•ASEAN Free Trade Area (AFTA) •ASEAN Plus Three• ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)•African Free Trade Zone (AFTZ) •Caribbean Community (CARICOM)•Central European Free Trade Agreement (CEFTA)•Dominican Republic – Central America Free Trade Agreement (DR-CAFTA)•North American Free Trade Agreement (NAFTA)•South Asia Free Trade Agreement (SAFTA)•Latin American Integration Association (ALADI)•European Economic Area (EEA) •Commonwealth of Independent States Free Trade Agreement (CISFTA)•Economic Community of West African States (ECOWAS)

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World Trade Organization Agreements

•Agreement on Agriculture•Agreement on the Application of Sanitary and Phytosanitary Measures•Agreement on Technical Barriers to Trade•Agreement on Trade-Related Aspects of Intellectual Property Rights•General Agreement on Trade in Services

Draft Working Party Report or Factual Summary adopted Goods and/or Services offers submitted Memorandum on Foreign Trade Regime submitted Observer, negotiations to start later or no Memorandum on FTR submitted Frozen procedures or no negotiations in the last 3 years No official interaction with the WTO

Members (including dual-representation with the European Communities)

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WTO Agreements Agreement on Agriculture: The AoA has three central concepts, or

"pillars": domestic support, market access and export subsidies.

Agreement on the Application of Sanitary and Phytosanitary Measures: Under the SPS agreement, the WTO sets constraints on members' policies relating to food safety (bacterial contaminants, pesticides, inspection and labeling) as well as animal and plant health (imported pests and diseases).

Agreement on Technical Barriers to Trade: The object ensures that technical negotiations and standards, as well as testing and certification procedures, do not create unnecessary obstacles to trade".

Green box

policies

Amber

policies

Blue box

policies

Page 19: Project Trade Blocs

WTO Agreements Agreement on Trade-Related Aspects of Intellectual

Property Rights (TRIPS): The Agreement on Trade-Related Aspects of Intellectual Property Rights sets down minimum standards for many forms of intellectual property (IP) regulation.

General Agreement on Trade in Services: was created to extend the multilateral trading system to service sector, in the same way the General Agreement on Tariffs and Trade (GATT) provides such a system for merchandise trade.Cross border

serviceConsumption

abroad

Processes service

Personal presence

Page 20: Project Trade Blocs

WTO Agreements Trade related investment measures

(TRIMS):Rules that apply to the domestic regulations, often

as apart of an industrial policy.Prohibitions under TRIMSProhibitions

Local content requirement

Manufacturing requirement

Export requirement

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WTO Agreements and India

Agreement on agriculture• Export subsides• Quantitative

restrictions• Export

restrictions for India

TRIPS• Pharma sector

of India• HYV seeds• Other Products

Agreement on textile and clothing• Increased trade

for India

Page 22: Project Trade Blocs

Impact on international tradePositive FTAs and trade blocs as drivers for liberalization. Members obtain preferred access to the markets of

other members. Reduce trade irritants and restrictions.

Negative The problem of trade diversion. FTAs and trade blocs only confer economic

advantages when they are negotiated with countries which are significant trading partners.

Increase the complexity of the international trading system

Raise transaction costs for business. Increased costs for the trading blocks or the

organizations.

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