#Regional Economic Blocs Free Flow Of#
#Regional Economic Blocs Free Trade Arearecognized#

Regional Economic Blocs Free Trade Arearecognized

Free Trade Arearecognized as a regional economic community, or REC-. A trading bloc is a formal agreement between two or more regional countries that remove trade barriers between the countries in the agreement while keeping trade barriers for other countries. In the opening case study, you learned how the economic crisis in Greece is threatening not only the EU in general but also the rights of Greece and other member nations to determine. With each new round of discussions and agreements within a regional bloc, nations may find that they have to give up more of their political and economic rights.

Regional Economic Blocs Free Flow Of

CommonВ MarketAВ CommonВ Market is like a customs union but there is a free flow of factors of productions between the countries. Customs UnionRegional Trading Blocs in the Global Economy will be welcomed by scholars and students interested in international trade, regional economics, European and.The six regional economic blocs are: the lake region economic bloc (13 members), the north rift economic bloc (7 members), the central kenya economic bloc (10 members), the jumuiyaua kaunti za Pwani (6 members), the south eastern kenya economic bloc (3 members) and the frontier counties development council (7 members)The existing literature in Africa, particularly in the Southern African regional integration bloc, has neglected the effects of regional economic integration.AВ Customs Union is like a free trade area except that member countries maintain a common tariff against non-member countries. For example, the North American Free Trade Agreement ( NAFTA) between the USA, Canada & Mexico created a free trade area. Counties have formed blocs largely due to their historical, political and economic similarities.The following six (6) blocs have already been established though mutual understanding between the various counties Two or more countries form a Free Trade AreaВ in which trade barriers between the countries areВ abolished but each country maintainsВ its own tariffs against non-member countries. Over the past few years, integration among counties has emerged.

Trade DiversionWhen a trade bloc is formed, an external tariff maybe be applied to non-member countries, making some goods that were initially cheaper, now more expensive. The more efficient producer produces, leading to less wastageВ of scarce resources. Trade CreationEliminations of trade barriers for member countries increase domestic production and consumption. Trading Blocs ExamplesвЂ“ North American Free Trade Agreement (NAFTA)вЂ“ Union of South American Nations (Unasur/Unasul) 1. For example, the European Union is an economic union. Economic UnionAn Economic Union has the same benefits asВ a common market but there is a common tax system and employs the same currency.

It increases local investments since the trading bloc increases the overall size of markets for firms. Size of MarketAn increase in foreign direct investment results from trade blocs and benefits the economies of participating nations. AdvantagesВ of Trading Blocs 1. This leads toВ trade diversion.

Loss of SovereigntyA trading bloc is likely to lead to at least partial loss of sovereignty for its participants. DisadvantagesВ of Trading Blocs 1. The average cost of production is decreased because mass production is allowed. Economic LeverageIncreases economic leverage for the trading bloc as a whole.В The larger markets created via trading blocs permit economies of scale.