Trade bloc

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A trade bloc is a large free trade area formed by one or more tax, tariff and trade agreements. Typically trade pacts that define such a bloc specify formal adjudication bodies, e.g. NAFTA trade panels. This may include even a more democratic and participative system, as the EU and its parliament.

Particularly since the demise of most of the world's empires, a number of international—generally regionally based—economic blocs have been developed to promote trade between member states.

Several blocs also have stated or implicit political goals—notably the EU. Varieties of economic blocs include free trade areas, customs unions, single markets, and economic and monetary unions.

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871.

A trade bloc is established through a trade pact (or pacts) covering different issues of the economic integration.

Contents

Most active regional blocs in the world.
Most active regional blocs in the world.

It is possible that a country is member of two (or more) different blocs. To avoid overlapping for this classification such countries are only included in the most active of the blocs in question. The "activity" of each block is measured by the following three criteria:

  • to have greater real practical achievements (not only declarations that are not followed by actual actions by its members)
  • to have more recent (or regular) activities (meetings, new agreements, other internal procedures)
  • to have more ambitious plans for future integration and a tighter timescale for it.

Also a country may be classified here as part of the less active regional bloc if the country itself is more active in it; Venezuela, for example, is a member of both the Andean Community and Mercosur. While Mercosur is a more active bloc than the Andean Community, Venezuela itself is much more active in the Andean Community than in Mercosur. Therefore Venezuela is assigned to the Andean Community for the purpose of this classification. (This is only an example. So, note, that Venezuela is planning to completely integrate with Mercosur by 2010).

Priority is given to such regional blocs that have ambitions for integration in more spheres than just economy (i.e. political, defense and other spheres). Sometimes activities are divided between different (but related) blocs with small deviations in membership (e.g. NATO and EU members are almost the same).

Some colors on the map are used multiple times for different blocs. A darker color means full member; a lighter color means associate state, observer state, prospective member, candidate, acceding state or a similar status.

Most active regional blocs
Regional
bloc 1		 Area (km²) Population GDP (PPP) ($US) Member
states 1
in millions per capita
EU 4,325,675 496,198,605 12,025,415 24,235 27
SAARC 5,136,740 1,467,255,669 4,074,031 2,777 8
CSN 17,339,153 370,158,470 2,868,430 7,749 10
ASEAN 4,400,000 553,900,000 2,172,000 4,044 10
NAFTA 21,588,638 430,495,039 15,279,000 35,491 3
EurAsEC 20,789,100 208,067,618 1,689,137 8,118 6
ECOWAS 5,112,903 251,646,263 342,519 1,361 15
SACU 2,693,418 51,055,878 541,433 10,605 5
GCC 2,285,844 35,869,438 536,223 14,949 6
COMESA 3,779,427 118,950,321 141,962 1,193 5
Agadir 1,703,910 126,066,286 513,674 4,075 4
CEMAC 3,020,142 34,970,529 85,136 2,435 6
CARICOM 462,344 14,565,083 64,219 4,409 14+1 3
EAC 1,763,777 97,865,428 104,239 1,065 3
CACM 422,614 37,816,598 159,536 4,219 5
PARTA 528,151 7,810,905 23,074 2,954 12+2 3
EFTA 529,600 12,233,467 471,547 38,546 4
Reference
blocs and
countries 2		 Area (km²) Population GDP (PPP) ($US) Political
divisions
in millions per capita
UN 133,178,011 6,411,682,270 55,167,630 8,604 192
Germany 357,050 82,438,000 2,585,000 31,400 16
Japan 377,873 128,085,000 4,220,000 33,100 47
Canada 9,984,670 32,507,874 1,165,000 35,200 13
Indonesia 1,904,569 234,300,000 935,000 4,000 33
Brazil 8,514,877 187,560,000 1,616,000 8,600 27
Russia 17,075,200 143,782,338 1,723,000 12,100 89
India 3,287,590 1,102,600,000 4,042,000 3,700 35
China (PRC) 4 9,596,960 1,306,847,624 10,000,000 7,600 33
USA 9,631,418 300,000,000 12,980,000 43,500 50
1 Including data only for full and most active members

2 The first five states in the World by area, population and GDP (PPP)
3 Including non-sovereign autonomous entities of other states

4 Data for the People's Republic of China does not include Hong Kong, Macau and
regions administered by the Republic of China (Taiwan).

     smallest value among the blocs compared      largest value among the blocs compared

During 2004. Source: CIA World Factbook 2005, IMF WEO Database
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Cooperation in the framework of the bloc currently stalled and status in light of DR-CAFTA is unclear

Under the umbrella of the African Union it is expected that ECOWAS, CEMAC/ECCAS, SACU/SADC, COMESA/IGAD and EAC will join into a common African Economic Community in 2019.

  • Americas:
    • Cuba: mostly isolated because of political system, possibility for CARICOM or CACM
    • Greenland (non-sovereign autonomous entity of Denmark): left the EU in 1985; status regarding FTA and customs union is unclear.
    • Panama: possibility for CSN or CACM
  • Arab States:
    • Iraq: aiming at GCC membership, but also possibility for Agadir
    • Palestine: problems with status, possibility for Agadir
    • Sahrawi Republic: member of the African Union, problems with status, possibility for Agadir
  • Oceania:
    • Australia: seeks further integration with ASEAN [3], associate member of PARTA, proposed Comprehensive Economic Partnership for East Asia (CEPEA) as part of the East Asia Summit
    • New Zealand: associate member of PARTA, proposed Comprehensive Economic Partnership for East Asia (CEPEA) as part of the East Asia Summit

Activities
Regional bloc Free Trade Area Customs Union Economic and monetary union Free Travel Political pact Defence pact Other
Single Market Currency Union Visa-free Border-less
EU in force 2 in force in force in force 1 in force in force
(Schengen 1 and CTA 1)		 in force in force
(NATO 1 and CFSP/ESDP 1)		 ESA 1, Euratom
EFTA in force in force 1 in force 1 in force 1 in force
(Schengen treaty 1)		 in force
(NATO 1)		 ESA 1
CARICOM in force in force in force 1 in force 1 and
proposed common		 in force 1 proposed proposed
CSN MERCOSUR in force in force in force proposed for 2014 [5]
CAN in force in force 1 in force
Common proposed for 2014 4 proposed for not after 2019 proposed for 2019 proposed for 2019 in force

[6]

 proposed for 2019
ECOWAS in force 1, 3 in force 1 in force 1 and
proposed for 2009 1 and
proposed common		 in force 1 proposed proposed in force
CEMAC in force in force proposed in force proposed in force
EAC in force in force proposed for 2009 proposed proposed for 2010
SACU in force in force proposed for 2012 de-facto in force 1 and proposed common for 2016 proposed [7]
COMESA in force 1 proposed for 2008 proposed for 2025
Agadir in force
GCC in force in force proposed for 2007 proposed for 2010
NAFTA in force proposed in force
(NATO 1 and Security and Prosperity Partnership of North America)
ASEAN in force 5 proposed for 2015 [8] proposed [9] in force [10] proposed for 2015 [11] proposed for 2020 [12]
SAARC in force 6
EurAsEC proposed proposed proposed in force [13] in force 1
PARTA in effect, proposed in force1 proposed proposed
CACM in effect7, proposed proposed proposed
AEC
(for reference)		 proposed for 2019 proposed for 2019 proposed for 2023 proposed for 2028 proposed for 2028

1 not all members participating yet
2 involving goods, services, telecommunications, transport (full liberalisation of railways from 2012), energy (full liberalisation from 2007)
3 telecommunications, transport and energy - proposed
4 sensitive goods to be covered from 2019
5 least developed members to join from 2012
6 least developed members to join from 2017
7 status is unclear

  1. ^ "Timor Leste Keen To Be Asean Member In Five Years", Malaysian National News Agency - BERNAMA, Saturday, February 03 2007.
  2. ^ "India, Bhutan's Big Question: China in SAARC", The Indian Express, Saturday, February 03 2007.
  3. ^ "Australia Seeks Free-Trade Accord, Asean Membership at Summit", Bloomberg, Saturday, January 13 2007.
  4. ^ "Iran Considering to Join SAARC, Says Kharrazi", Arab News, Saturday, February 03 2007.
  5. ^ "Definidos critérios para o Parlamento do Mercosul", Senado Federal - Notícias, Saturday, February 03 2007.
  6. ^ "CNN", CNN, Saturday, February 03 2007.
  7. ^ "Prensa Latina", Prensa Latina, Saturday, February 03 2007.
  8. ^ "Asean Trade Mins Meet To Speed Up Plans For Single Market", Malaysia Dual Lingual Business News, Saturday, February 03 2007.
  9. ^ "Envisioning a single Asian currency", International Herald Tribune, Saturday, February 03 2007.
  10. ^ "ASEAN To Sign Accord On Visa-Free Travel", AHN - All Headline News, Saturday, February 03 2007.
  11. ^ ASEAN Secretariat (2007-1-13). ASEAN Leaders Sign Five Agreements at the 12th ASEAN Summit, Cebu, the Philippines, 13 January 2007. Press release. Retrieved on 2007-1-28. “On the first day of the 12th ASEAN Summit, five Agreements have been signed by ASEAN leaders - reinforcing their commitment in the continuing integration of ASEAN and enhancing political, economic and social cooperation in the region.”
  12. ^ "ASEAN defense ministers aim for security community", ABS-CBN, Saturday, February 03 2007.
  13. ^ "Itar-Tass", Itar-Tass, Saturday, February 03 2007.


 view  Topics in Trade

Definitions

Balance of payments · Current account (Balance of trade) · Capital account · Foreign exchange reserves · Comparative advantage · Absolute advantage · Import substitution · International trade

Organizations & Policies

World Trade Organization · International Monetary Fund · World Bank · International Trade Centre · Trade bloc · Free trade zone · Trade barrier · Import quota · Tariff

Schools of Thought

Free trade · Balanced trade · Mercantilism · Protectionism

Related Issues

Globalization · Outsourcing · Trade justice and fair trade
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