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A trade bloc can be defined as a preferential trade agreement (PTA) between a subset of countries, designed to significantly reduce or remove trade barriers within member countries. When a trade bloc comprises neighbouring or geographically close countries, it is referred to as a regional trade (or
integration) agreement.
The two principal characteristics of a trade bloc are that: (1) it implies a reduction or elimination of barriers to trade, and (2) this trade liberalisation is discriminatory, in the sense that it applies only to the member countries of the trade bloc, outside countries being discriminated against in their trade relations with trade bloc members.
Trade blocs can also entail deeper forms of integration, for instance of international competition, investment, labour and capital markets (including movements of factors of production), monetary policy, etc.
Several reasons explain the recent emergence of trade blocs. The so-called old regionalism was motivated by the desire to pursue in developing countries import substitution development at a regional level, to insulate a region from the world economy and to stabilise and foster the economy at a regional level. In other words, the fewer the number of participants to trade negotiations, the larger the number of issues on which it is possible to reach an agreement. Another claimed advantage of PTAs is that they may help ensuring the credibility of the
is a family of democratic European countries. Committed to working together for peace and prosperity. Its historical roots lie in the second world war. Idea of European integration was conceived to prevent such killing and destruction from ever happening again.
origins
19 September 1950: European Payments Union (EPU) 18 April 1951: European Coal and Steel Community established 25 March 1957: Treaty of Rome 29 December 1958: Agreement European Monetary
institutions
European
parliament(elected by peoples of member states) Council of European union(representing the governments of member states) European commission(driving force and the executive body) Court of justice Court of auditors
principles
Overall reciprocity and mutuality of advantages so as to benefit equitably all Contracting States, taking into account their respective level of economic and industrial development, the pattern of their external trade, and trade and tariff policies and systems. Negotiation of tariff reform step by step, improved and extended in successive stages through periodic reviews. Recognition of the special needs of the Least Developed Contracting States and agreement on concrete preferential measures in their favors. Inclusion of all products, manufactures and commodities in their raw, semi-processed and processed forms.