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TRADE BLOCKS & BUSINESS CENTRES

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Economic Integration

Countries create business opportunities for themselves by integrating their economies

To avoid unnecessary competition among themselves & also from other countries

Covers different kinds of arrangements between or among countries

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Different kinds of Economic Integration

Free Trade Area: Group of countries Agree to abolish all trade restrictions &

barriers Or charge low rates of tariffs

Countries impose w.r.t trade with countries other than members of the group

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Custom Unions: 2 basic features: Member countries abolish all restrictions

& barriers on trade among themselves or charge low rates of tariffs

They adopt uniform commercial policy of barriers & restrictions jointly w.r.t. trade with non-member countries

Different kinds of Economic Integration

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Common Market: 3 basic characteristics: Allow free movement of HR & capital

among the member countries

Thus superior than customs union

Different kinds of Economic Integration

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Economic Union: 4 basic characteristics: Achieve uniformity in monetary policy &

fiscal policy among the member countries

Economic union>common mkt>customs union>free trade area

Different kinds of Economic Integration

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Advantages of integration..

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European Union

Origin: European Coal & Steel Community (ECSC)

Formed by West Germany, France, Italy, Belgium, Netherlands & Lexumbourg – 1952

Aim: to eliminate import duties on coal, iron ore, steel & scrap

Facilty then extended by Treaty of Rome in 1957 & gave birth to European Economic Community

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Requirements for joining: Country – to be European Democratic country

European Union

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Objectives..

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Activities..

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Organization of EU

European Council – main administrative body of EU

Each member country – represented by – minister of this council

Each member holds presidency – 6 months Committee of permanent representatives –

Secretariat Committee also called “Corper” Makes all imp decisions Link between EU & member govt…

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NAFTA

North American Free Trade Agreement – 1st January 1994

USA, Canada & Mexico Objectives..

Measures..

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The Association of South-East Asian Nations ( ASEAN)

6 countries Singapore Brunei Malaysia Philippines Thailand Indonesia

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Asean Free Trade Area (AFTA) Objectives: Encourage inflow of foreign investment

into this region Establish free trade area in member

countries Reduce tariff

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AFTA & India..

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European Free Trade Association (EFTA)

1959 Austria Norway Portugal Sweden Switzerland

Associate member countries are: Finland Iceland Great Britain Denmark

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Objectives: To eliminate almost all tariffs among member

countries

To abolish trade restrictions regarding imports & exports among member countries

To enhance economic development, employement, incomes & living stds of people of member countries

Enable free trade in Western Europe

European Free Trade Association (EFTA)

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Latin American Integration Association (LAIA)

Latin American Free Trade Association (LAFTA) Countries: Argentina Brazil Chile Mexico Paraguay Peru Uruguay Colombio Venenzula Bolivia

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Objectives: To eliminate restrictions on trade among

the member countries To reduce the customs & tariffs &

eliminate them gradually

Latin American Integration Association (LAIA)

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Organization Structure

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Operations

Members prepare a list of goods on which they consider duty reductions

They negotiate once in 3 years for complete exemption on tariffs &

Decide the list of products eligible for complete exemption of tariffs…

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South Asian Association for Regional CO-operation (SAARC)

December 6, 1985 India Bangladesh Bhutan Pakistan Maldives Nepal Sri Lanka

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Objectives..

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Organization Structure

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Organization Structure

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The Economic & Social Commission for Asia & The Pacific (ESCAP)

48 member countries & 10 associate countries

Sub-divided into: Pacific Island countries The developing ESCAP countries ASEAN Developed ESCAP countries China & newly industrializing countries South Asian Countries

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Asia-Pacific Economic Co-Operation (APEC)

Forum for facilitation economic growth, co-operatio, trade & investment in Asia-Paacific region

Established in 1989 – to enhance economic growth & prosperity for the region & to strengthen the Asia-Pacific Community

Worked to reduce tariffs & other trade barriers across Asia-Pacific region

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Free & Open trade & investment in Aisa-Pacific

Free Trade: helps economies to grow Create jobs Provides greater opportunities for

international trade Lower the costs of production & reduces

prices of goods & services

Asia-Pacific Economic Co-Operation (APEC)

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MERCOSUR

Treaty of Asuncion signed by Argentina, Paraguay – march 26, 1991 created MERCOSUR

Chile & Bolivia – associate member – 1996

South America’s largest trade block

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ANDEAN

Sub regional organization endowed with an international legal status

Made of Bolivia, Colombia, Ecuador, Peru, Venezuela