Kumar Bijoy

Definition :

Regional trade blocks are intergovernmental associations that manage and promote trade activities for specific regions of the world

They have political as well as political implications for example the European union , the worlds largest trading block has harbored political ambitions. The Maastricht treaty which gave birth to EU calls for joint policies in regard to military , defense, and citizenship

MAJOR TRADE BLOCKS 1) EUROPEAN UNION (EU) 2) NORTH AMERICAN FREE TRADE AGREEMENT

(NAFTA) 3)SINGAPORE –AMERICAN FREE TRADE

AGREEMENT(SAFTA) 4) ORGANISATION OF PETROLEUM EXPORTING

COUNTRIES (OPEC) 5) ASSOCIATION OF SOUTH EAST ASIAN NATION

(ASEAN) 6) SOUTH ASIAN ASSOCIATION OF REGIONAL CO-

OPERATION (SAARC)

DEBATE ON TRADING BLOCKS THERE ARE TWO VIEWS : 1)ANALYST LIKE PREEG ARGUE THAT TRADE

BLOCS ARE DESIRABLE BECAUSE THEY COMPLIMENT GLOBAL TRADE.

2)OTHER ANALYST ARGUE THAT TRADE BLOCS ARE NOT DESIRABLE BECAUSE THEY ARE THREAT TO FREE TRADE AND NEED TO PROTECTIONISM

WHY TRADE BLOCS ARE DESIRABLE

TRADE BLOCS COMPLIMENT GLOBAL TRADE

THEY PROTECT INTRA REGIONAL TRADE FORM OUTSIDE FORCES.

THEY ESTABLISH REGIONAL SECURITY.

WHY T. B. ARE UNDESIRABLE IMPORT QUOTAS(LIMITING THE AMOUNT OF

IMPORTS INTO THE COUNTRY SO THAT DOMESTIC CONSUMERS BUY PRODUCTS MADE BY THEIR COUNTRIES IN THEIR REGION).

CUSTOM DELAYS (ESTABLISHING BUREAUCRATIC FORMALITIES THAT SLOW DOWN TRADE FROM THE OTHER REGION)

SUBSIDIES BARRIER (GIVING HEAVY SUBSIDIES TO PROTECT REGIONAL TRADE )

VOLUNTRY BOYCOTTS AND TECHNICAL BARRIERS.

The Organization of the Petroleum Exporting Countries (OPEC) IT’S A PERMANENT ORGANIZATION ESTABLISHED IN

1960 AT THE BAGHDAD CONFERENCE BY IRAN IRAQ, KUWAIT, SAUDI ARABIA, AND VENEZUELA.

IT WAS LATER JOINED 8 OTHER MEMBERS. ITS HEAD QUARTER IS IN VIENNA. ITS OBJECTIVE IS TO COORDINATE AND UNIFY

PETROLEUM POLICIES AMONGS THE MEMBER COUNTRIES

TO SECURE FAIR AND STABLE PRICES FOR PETROLEUM PRODUCERS.

PROPER PRICE AND REGULAR SUPPLY OF PETROLEUM FOR CONSUMING NATIONS.

ASEAN www.aseansec.org

ESTABLISHED IN 1967 . 5 FOUNDING MEMBERS : INDONESIA , MALAYASIA,

PHILLIPINES, SINGAPORE AND THILAND. LATER ON JOINED BY BRUNEI, MYANMAR,VIETNAM

ETC. ASEAN FREE TRADE AREA (AFTA) . ASEAN BEYOND TRADE HAS POLITICAL ROLE AS

VISIBLE BY THE FORMATION OF ASEAN REGIONAL FORUM OF WHICH CHINA, INDIA AND USA ARE MEMBERS.

ASEAN AS A TRADING BLOC HAS BEEN A HUGE SUCCESS LEADING TO PROSPERITY AND ELIMINATION OF POVERTY IN THE MEMBER COUNTRY

SAARC The South Asian Association for Regional

Cooperation (SAARC) was established when its Charter was formally adopted on December 8, 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka.

SAARC provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to accelerate the process of economic and social development in Member States.

AREAS OF COOPERATION Agriculture and Rural Development; Health and Population Activities; Women, Youth and Children; Environment and Forestry; Science and Technology and Meteorology; Human Resources Development; and Transport. Recently, high level Working Groups have also been

established to strengthen cooperation in the areas of Information and Communications Technology, Biotechnology, Intellectual Property Rights, Tourism, and Energy.

The Heads of State or Government welcomed the entry of the Islamic Republic of Afghanistan into SAARC. This was a historic moment as Afghanistan assumed its rightful place as a valued member of the SAARC fraternity

The SAARC Secretariat The SAARC Secretariat was established in Kathmandu

on 16 January 1987. Its role is to coordinate and monitor the implementation of SAARC activities, service the meetings of the Association and serve as the channel of communication between SAARC and other international organisations. The Secretariat has also been increasingly utilised as the venue for SAARC meetings.

The Secretariat comprises the Secretary General, seven Directors and the General Services Staff. The details of its officials and working divisions responsible for areas of work can be viewed under respective links.

Established Centres

1.SAARC Agricultural Information Centre (SAIC), Dhaka 2.SAARC Meteorological Research Centre (SMRC), Dhaka 3.SAARC Tuberculosis Centre (STC), Kathmandu 4.SAARC Documentation Centre (SDC), New Delhi 5.

SAARC Human Resources Development Centre (SHRDC), Islamabad

6.SAARC Coastal Zone Management Centre, Maldives

7.SAARC Information Centre, Nepal 8.SAARC Energy Centre, Pakistan 9.SAARC Disaster Management Centre, India 

SAARC BORN IN 1985 7 MEMBERS COUNTRIES :BANGLADESH, BHUTAN,

INDIA,MALDIVES,NEPAL,PAKISTAN AND SRI LANKA IT HAS 1.3 BILLION INHABITANTS REPRESENTS 22% OF THE WORLD POPULATION BUT

ONLY 1.9% OF THE WORLD GNP. SAARC HAS BEEN A SHEER FAILURE. THE TOTAL EXTERNAL TRADE OF THE REGION – 0.8%

OF WORLD EXPORTS AND 1.3% OF WORLD IMPORTS THE REASON BEING POLITICAL DISPUTE BETWEEN

MEMBER COUNTRIES

SAARC CONTD…….

STILL SOME PROGRESS HAS BEEN ACHIEVED

SAPTA (SOUTH ASIAN PREFERENTIALTRADING AGREEMENT) HAS COME INTO FORCE IN 1995

CONSENSUS ON SAFTA(SOUTH ASIAN FREE TRADE AREA)HAS BEEN REACHED

North American Free Trade Agreement

The North American Free Trade Area is the trade bloc in North America created by the North American Free Trade Agreement (NAFTA) and its two supplements, the North American Agreement on Environmental Cooperation (NAAEC) and the The North American Agreement on Labor Cooperation (NAALC), whose members are Canada, Mexico and the United States. It came into effect on 1 January 1994.

Objectives (Article 102)

The objectives of this Agreement, as elaborated more specifically through its principles and rules, including national treatment, most-favored-nation treatment and transparency, are to: a) eliminate barriers to trade in, and facilitate the

cross-border movement of, goods and services between the territories of the Parties;

b) promote conditions of fair competition in the free trade area;

c) increase substantially investment opportunities in the territories of the Parties;

d) provide adequate and effective protection and enforcement of intellectual property rights in each Party's territory;

e) create effective procedures for the implementation and application of this Agreement, for its joint administration and for the resolution of disputes; and

f) establish a framework for further trilateral, regional and multilateral cooperation to expand and enhance the benefits of this Agreement.

2. The Parties shall interpret and apply the provisions of this Agreement in the light of its objectives set out in paragraph 1 and in accordance with applicable rules of international law.

NAFTA

BORN IN JANUARY 1994. MEMBER NATIONS:US,CANADA AND

MEXICO. it’s the WORLD LARGEST FREE TRADE

AREA. UNDER NAFTA, ALL NON TARIFF BARRIERS

TO AGRICULTURE WERE ELIMINATED. MANY TARRIFFS ARE BEING ELIMINATED

OVER A PEROID OF 5-15 YRS.

NAFTA TWO WAY TRADE BETWEEN US & MEXICO

HAS INCREASED BY MORE THAN 55%.($11.6 BILLION).

TWO WAY TRADE BETWEEN US &CANADA INCREASED MORE THAN 50%(16.3 BILLION.)

HUGE BENEFITS HAVE ACCRUED TO THE NAFTA MEMBER COUNTRIES.

NAFTA HAS BEEN A ROARING SUCCESSS.

EU IT IS A FAMILY OF DEMOCRATRIC

EUROPEAN COUNTRIES. COMMITED TO WORKING TOGETHER FOR

PEACE AND PROSPERITY. ITS HISTORICAL ROOTSLIE IN THE SECOND

WORLD WAR. IDEA OF EUROPEAN INTEGRATION WAS

CONCEIVED TO PREVENT SUCH KILLING AND DESTRUCTION FROM EVER HAPPENING AGAIN.

Member states of the EU: Austria, Belgium, Bulgaria, Cyprus,

Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom

The Euro: Our Currency The euro is the currency of 13 European

Union countries: Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Slovenia and Finland.

Euro banknotes and coins have been in circulation since 1 January 2002 and are now a part of daily life for 315 million Europeans living in the euro area

The conduct of monetary policy The Eurosystem is in charge of defining

and implementing the monetary policy of the euro area. Its primary objective in this respect is to maintain price stability in the euro area. It furthermore conducts foreign-exchange operations (consistent with the exchange-rate policy defined by the Council), holds and manages the official foreign reserves of the euro-area Member States and promotes the smooth operation of payment systems

FIVE EU INSTITUTIONS EUROPEAN PARLIAMENT.(ELECTED BY

PEOPLES OF MEMBER STATES) COUNCIL OF EUROPEAN

UNION(REPRESENTING THE GOVERNMENTS OF MEMBER STATES).

EUROPEAN COMMISION(DRIVING FORCE AND THE EXECUTIVE BODY).

COURT OF JUSTICE. COURT OF AUDITORS.

THE RULE OF LAW IS FUNDAMENTAL TO THE EUROPERAN UNION.ALL EU DECISIONS ARE BASED ON TREATIES.,WHICH ARE AGREED BY ALL EU CONTRIES.

EU CONSISTED OF JUST 6 COUNTRIES: BELGIUM,GERMANY,FRANCE,ITALY,LUXEMBOURG & NETHERLANDS.

FURTHER ADDITIONS HAVE BEEN REAPEATEDLY TAKEN PLACE.

LAST INCREASE TOOK PLACE IN 2004,WITH 10 NEW COUNTRIES JOINING IN.

ACHIEVEMENTS IT HAS ENSURE FREEDOM,SECURITY & JUSTICE. JOB CREATION. REGIONAL DEVELOPMENT & ENVIRONMENTAL

PROTECTION. IT HAS HELPED RAISED LIVING STANDARDS,BUILT A

SINGLE EUROPE WIDE MARKET. LAUNCHED THE SINGLE EUROPEAN CURRENCY- THE

EURO. IT HAS STRENGTHNED EUROPES VOICE IN THE

WORLD.

CASE STUDYWHY ASEAN IS SUCCESSFUL AND SAARC HAS BEEN

UNSUCCESSFUL.o ASEAN IS ONE OF THE MAJOR TRADING BLOCS IN THE

WORLDo IT REPRESENTS 420 MILLION PEOPLE.o It's a LARGER TRADE BLOCK THAN NORTH AMERICA

AND WESTERN EUROPE.o SAARC REPRESENTS 22% OF HUMANITY.o THERE IS A CONTRADICTION, AN IRONY BETWEEN

ASEAN & SAARC.o WHILE ASEAN HAS BEEN A ROARING SUCCESS &

CALLED ASIAN TIGERS ,SAARC HAS BEEN A SHEER FAILURE.

REASONS IN ASEAN ALL COUNTRIES ARE OF EQUAL

GEOGRAPHIC SIZE. LEVEL OF ECONOMIC DEVELOPMENT IS THE SAME IN

ALL COUNTRIES. COMMON FEAR OF COMMUNIST CHINA ALL OF THEM HAD SIMILAR ECONOMIC POLICIES.THEY

ALL INTRODUCED ECONOMIC LIBERALIZATION IN 1960s WHICH FURTHER ACCLERATED ECONOMIC GROWTH.

WAY OF FUNCTIONING OF ASEAN BASED ON TWO PRINCIPLES:

1.MUSYAURARAH(CONSENSUS). 2.MUFAKAT(CONSULATATIONS).

INDIAs TRADE WITH ASEAN IS MORE THAN 20 TIMES THAN IN CASE OF SAARC.

IN SOUTH ASIA INDIA IS THE LARGEST COUNTRY.IT OCCUPIES MORE THAN 70% OF GEOGRAPHICAL AREA.

SO OTHER NATIONS FEEL THAT STRENGTHENING SAARC MEANS EMPOWERING INDIA.

SERIOUS BILATERAL DISPUTES BETWEEN TWO MAJOR SOUTH ASIAN POWERS i.e INDIA & PAKISTAN.

BILATERAL DISPUTES AND DIFFERENCES BETWEEN OTHER MEMBER COUNTRIES.

INDIA,BANGLADESH DISPUTE. INDIA ,NEPAL DISPUTE. NEPAL MYNMAR DISPUTE. PAKISTAN BANGLADESH DISPUTE.

VAST DIFFERENCE IN ECONOMIC DEVELOPMENT..

INDIA IS A DEVELOPED ECONOMY OF SOUTH ASIA .OTHER CONTRIES ARE LESS DEVELOPED.

PURCHASING POWER OF T HESE CONTRIES IS VERY LOW.THEY CANNOT ACT EVEN AS A MARKET OF INDIAN GOODS.