TRADE BLOCS

FREE TRADE
Free Trade is a market model in which trade in goods and
services between or within countries flow unhindered by
government-imposed restrictions.
Free trade is a term that includes:
Trade of goods without taxes (including tariffs) or other trade
barriers (e.g. quotas on imports or subsidies for producers)
Trade in services without taxes or other trade barriers
The absence of trade-distorting policies (such as taxes, subsidies,
regulations or laws) that give some firms, households or factors
of production an advantage over others
Free access to markets and market information
Inability of firms to distort markets through government-
imposed monopoly or oligopoly power
The free movement of labour between and within countries
The free movement of capital between and within countries
Trade Bloc
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.

A trade bloc is established through a trade pact (or pacts)

covering different issues of the economic integration.
Description
The South Asian Association for Regional
Cooperation (SAARC) is an economic and political
organization of eight countries in Southern Asia. In
terms of population, its sphere of influence is the
largest of any regional organization: almost 1.5 billion
people, the combined population of its member states.
It was established on December 8, 1985 by India,
Pakistan, Bangladesh, Sri Lanka, Nepal, Maldives and
Bhutan. In April 2007, at the Association's 14th
summit, Afghanistan became its eighth member.
MEMBERS
Headquarters Kathmandu, Nepal
Membership 8 member states,6 observers

•Islamic Republic of Afghanistan

• Kingdom of Bhutan
• Republic of India
• Republic of Maldives
• State of Nepal
• Islamic Republic of Pakistan
• People's Republic of Bangladesh
• Democratic Socialist Republic of Sri
Lanka
OBJECTIVES
To promote the welfare of the people of South-Asia
and to improve their quality of life.
To accelerate economic growth.
To promote active collaboration and mutual
assistance in the economic, social, cultural, technical
and scientific fields.
To promote and strengthen collective self-reliance
among the countries of South Asia.
To contribute to mutual trust, understanding and
appreciation of one another’s problems
History
In the late 1970s, Bangladesh's president Ziaur Rahman
proposed the creation of a trade bloc consisting of South Asian
countries. The Bangladeshi proposal was accepted by India,
Pakistan and Sri Lanka during a meeting held in Colombo in
1981. In August 1983, the leaders adopted thehich was held in
New Delhi. The seven South Asian countries, which also
included Nepal, Maldives and Bhutan, agreed on five areas of
cooperation:
Agriculture and Rural Development
Telecommunications, Science, Technology and Meteorology
Health and Population Activities
Transport
Human Resource Development
Free Trade Agreements
In 1993, SAARC countries signed an agreement to
gradually lower tariffs within the region, in Dhaka.
Nine years later, at the 12th SAARC Summit at
Islamabad, SAARC countries devised the South Asia
Free Trade Agreement (SAFTA) which created a
framework for the establishment of a free trade area
covering 1.4 billion people. This agreement went into
force on July 1, 2006. Under this agreement, SAARC
members will bring their duties down to 20 per cent
by 2007.
Political Issues
SAARC has intentionally laid more stress on "core issues"
mentioned before rather than more decisive political
issues like;
 the Kashmir dispute, between India and Pakistan
 the Sri Lankan civil war.
However, political dialogue is often conducted on the
margins of SAARC meetings. SAARC has also refrained
itself from interfering in the internal matters of its
member states. During the 12th and 13th SAARC summits,
extreme emphasis was laid upon greater cooperation
between the SAARC members to fight terrorism.
Ineffectiveness
SAARC's inability to play a crucial role in integrating
South Asia is often credited to the political and
military rivalry between India and Pakistan. It is due
to these economic, political, and territorial disputes
that South Asian nations have not been able to
harness the benefits of a unified economy.
Dhaka 2005
The summit accorded observer status to People's
Republic of China, Japan, South Korea and United
States of America. The nations also agreed to organize
development funds under a single financial institution
with a permanent secretariat, that would cover all
SAARC programs ranging from social, to
infrastructure, to economic ones.
DESCRIPTION
The ASEAN bloc was established on August 8,
1967, when foreign ministers of five countries –
Indonesia, Malaysia, the Philippines, Singapore,
and Thailand – met at the Thai Department of
Foreign Affairs building in Bangkok and signed
the ASEAN Declaration, commonly known as the
Bangkok Declaration.

It is an Association for Regional Cooperation

among the Countries of Southeast Asia.
 MEMBERS
ORIGINAL MEMBERS (1967)

Indonesia Malaysia Phillipines Singapore Thailand

Brunei Darussalam Vietnam (July Myanmar Cambodia (April

(January 1984) 1995) (July 1997 ) 1999 )

Lao PDR
(July 1997 )
FACTS AND FIGURES
Population - 500 million

Total Area - 4.5 million square kilometers

Combined Gross Domestic Product - US$ 700

billion (approx)
Total Trade - US$ 850 billion (approx)

Source : www.aseansec.org
OBJECTIVES
To accelerate economic growth, social progress and
cultural development in the region
Preferential trading including reduced tariffs and non-
tariff barriers
Guaranteed member access to the markets throughout
the region
Harmonized Investment Incentives
To promote regional peace and stability through
abiding respect for justice and the rule of law
ASEAN Free Trade Area
Agreement by the member nations of ASEAN
concerning local manufacturing in all ASEAN
countries
Signed on January 28, 1992 in Singapore
Elimination of tariff and non-tariff barriers among
member countries
ASEAN Plus Three
A forum for ASEAN plus China, Japan and
South Korea primarily to deal with the trade and
monetary issues facing Asia.
Meetings held during each ASEAN Summit
May lead to a common market, single currency
and even a new Bloc comprising of Northeast and
Southeast Asia.
ESTABLISHMENT AND MEMBERS
CARICOM was established by the Treaty of
Chaguaramas on 1st August 1973 and the four
signatories were Barbados, Jamaica, Guyana
and Trinidad and Tobago.
Currently CARICOM has 15 full members,
five associate members and seven observers.
STRUCTURE
CARICOM has organised itself into a state like
Government structure made up of the following branches:
The Executive, The Legislation and The Judiciary

The goal of the Secretariat is “To provide dynamic

leadership and service, in partnership with Community
institutions and Groups, toward the attainment of a viable,
internationally competitive and sustainable Community,
with improved quality of life for all."
 CARICOM Single Market and
Economy (CSME)
The CSME is an integrated development strategy (July 1989)
has three key Features:
1. Deepening economic integration by advancing beyond a
common market towards a Single Market and Economy.
2. Widening the membership and thereby expanding the
economic mass of the Caribbean Community.
3. Progressive insertion of the region into the global trading and
economic system by strengthening trading links with non-
traditional partners
• Trade in goods: All goods which meet the CARICOM
rules of origin are traded throughout without restrictions.
• Caribbean Regional Organization on Standards and
Quality (CROSQ): Responsible for establishing regional
standards in the manufacture and trade of goods which all
Member States must adhere to.
• Trade in Services and The Right of Establishment: The
main objective is to facilitate trade and investment in the
services sectors of CSME Member States through the
establishment of economic enterprises and CARICOM
service providers will be able to offer their services
throughout the region
Work Permits and the Free Movement of People:
The Caribbean Community (CARICOM) Free Movement of
Persons Act, provides for the free movement of certain
categories of skilled labour, (by applying for Skills
Certificates)
Harmonization of Legislation: Harmonized regimes for
Anti-dumping and countervailing measures, Banking and
securities, Consumer protection, Customs, Intellectual
property rights etc.
Free Movement of Capital and Single Currency: The free
movement of Capital involves the elimination of the various
restrictions such as foreign exchange controls and allowing for
the convertibility of currencies or a single currency and capital
market integration via a regional stock exchange.
COUNCIL MEMBERS
The United Arab Emirates
The State of Bahrain
The Kingdom of Saudi Arabia
The Sultanate of Oman
The State of Qatar
The State of Kuwait
OBJECTIVES
The basic objectives of the Cooperation Council are:

To effect coordination, integration and inter-connection

between Member States in all fields.
Strengthening ties between their peoples.

Formulating similar regulations in various fields such as

economy, finance, trade, customs, tourism, legislation &
administration.
Fostering scientific and technical progress in industry,
mining, agriculture, water and animal resources.

Establishing scientific research centers, setting up joint

ventures, and encouraging cooperation of the private sector.
Organization of the Cooperation
Council
The Cooperation Council shall have the following main
organizations:

1. The Supreme Council

2. The Ministerial Council

3. The Secretariat General.

PARTA
Pacific Regional Trade Association.
Trade Agreement Type
Plurilateral Free Trade Agreement
Participating Nations
Australia, Cook Islands, Fiji, Kiribati, New Zealand,
Niue, Papua New Guinea, Solomon Islands, Tonga,
Tuvalu, Western Samoa
Notes
A PARTA would represent a market of almost 29 million
and a total GDP of US $657.7 billion (of which Australia
and New Zealand account for US $640 billion).
Negotiations
At the 1997 meeting of the Forum Economic Ministers
Meeting in Cairns, it was agreed that a study be
undertaken on options for the creation of a FTA among
FICs. In 1998, the Forum Leaders directed the Forum
Trade Ministers to consider a draft Framework Agreement
for the creation of a FTA. A number of studies have been
completed and at the South Pacific Forum (28-30 August)
in Nadji, Fiji, negotiations for a Pacific Regional Trade
Agreement (PARTA) began.
The Forum members will have an eight year timetable to
eliminate tariff barriers, while the nine Forum members
who are Smaller Island States will have ten years to do so.
Contd....
By 2012, it is expected that the free trade area across
the Forum Island Countries will be complete.
In March 2001, Perhaps the most contentious issue
amongst Forum Island Countries, and therefore,
obstacle to a RTA is how to include Australia and New
Zealand in a reciprocal Free Trade Agreement without
disadvantaging the smaller Pacific Island economies.
REFERENCES
 About SAARC. Retrieved November 20,2007 from http://www.saarc-
sec.org/main.php
 About SAARC Summits. Retrieved November 20,2007 from
http://en.wikipedia.org/wiki/southasian Association For Regional
Cooperation
 About ASEAN. Retrieved November 25,2007 from
http://www.aseansec.org/7069.htm
 About ASEAN Summits. Retreived Novemeber 25,2007
http://en.wikipdia.org/wiki/Association_of_Southeast_Asian_nations#A
SEAN_Summit
 Levi, W. Noel. “ Can Protectionism be eliminated in the 21 st
century?”. Retreived May 17, 1999 from www.Forumsec.org.fj/news
 About CARICOM. Retrieved November 24,2007 from
http://en.wikipedia.org/wiki/Carribean Community
 About GCC. Retrieved November 26,2007 from http://www.gcc-sg.org/