Group of countries
Existence within a geographical region.
Motive is to protect themselves from the
imports of non-members
A form of economic integration
increasingly shaping the pattern of
4. TYPES OF TRADING BLOCS
Major Types of Trading Blocs:-
1.Preferential Trade Area (PTA’s)
2.Free Trade Area
5. MAJOR TRADE BLOCS
A. EU (European Union)
B. NAFTA (North American Free Trade
C. OPEC (Organisation of Petroleum Exporting
D. ASEAN (Association of South East Asian
E. SAARC ( South Asian Association for
F. MERCOSUR (Mercado Comun del Cono
Sur, also known as Southern Common
6. A. European Union (EU)
The world’s largest trading bloc.
largest economy in the world.
Originally called the “Economic Community”.
(Common Market or The Six)
Formed from the ‘Treaty of Rome’ in 1957.
It comprised of 6 members- Germany, France, Italy,
Belgium, Netherlands and Luxemburg.
At present it comprises of 27
7. Objectives of European Union
Setting up a common market for all
goods & services by eliminating all
Promoting free trade among the
Continuous and balanced expansion.
Closer relations between the member
8. B. North American Free Trade
Initially bilateral trade between Canada & U.S.
NAFTA went into effect in January 1,1994 after
the joining of Mexico, creating a trilateral trade
bloc in North America.
World’s largest free trade area.
NAFTA has two supplements: the North American
Agreement on Environmental
Cooperation (NAAEC) and the North
American Agreement on Labour
9. Provisions of NAFTA
Eliminate barriers to trade & investment
between US, Canada & Mexico.
Duty-free market access.
Trade rules- safeguard, subsidies
countervailing & antidumping duties, health
& safety standards.
Rules on trade in services & investment.
Protection of intellectual property.
Dispute settlement mechanism.
10. C. Organisation of Petroleum Exporting
A permanent, intergovernmental Organization, created at
the Baghdad Conference on September 10–14, 1960 ( Iraq,
Kuwait, Iran, Saudi Arabia and Venezuela ).
Later joined by 8 more countries.
The main objective is to coordinate and unify petroleum
policies among the member countries.
To secure fair and stable price for petroleum producers.
Proper price and regular supply for petroleum consuming
Its Headquarter is in Vienna, Austria.
11. D. Association of Southeast Asian
August,1967 (Indonesia, Malaysia,
Philippians, Singapore & Thailand)
Later joined by Brunei, Burma, Cambodia,
Laos & Vietnam
Established ASEAN Free Trade Area (AFTA)
Headquarter- Jakarta, Indonesia.
12. Aims of AFTA:-
Primary goals of AFTA are:-
To encourage inflow of foreign investment
into this region.
To establish free trade area in the member
To reduce tariff of the products produced in
13. Objectives of ASEAN
Accelerating Economic Growth.
Cultural Development among its
Protection of regional peace and
Discuss issues peacefully.
14. E. South Asian Association for
Regional Cooperation (SAARC)
Established on 8th
Member Countries- Bangladesh, Bhutan, India,
Maldives, Nepal, Pakistan & Sri Lanka
Headquarter- Kathmandu, Nepal
15. Objectives of SAARC
to promote the welfare of the people of South Asia
and to improve their quality of life
to accelerate economic growth, social progress and
cultural development in the region
to promote and strengthen selective self-reliance
among the countries of South Asia
to contribute to mutual trust, understanding and
appreciation of one another's problems
to strengthen cooperation with other developing
to maintain peace in the region
• The council of ministers have signed the
SAARC preferential trading arrangement
agreement on April 11, 1993.
To gradually liberalize the trade among
members of SAARC
To eliminate trade barriers among SAARC
countries & reduce or eliminate tariffs
To promote and sustain mutual trade &
economic cooperation among member
18. F. MERCOSUR; Mercado Comun del
• Established in 1991 by Brazil, Argentina,
• These four members generate 70% GNP of South
• By 1996, MERCOSUR had abolished tariffs on
goods accounting for 90% of the trade between its
members countries, with remaining tariffs to be
abolished by 2000.
• MERCOSUR & EU Signed a cooperation
agreement to pave the way for a free trade accord