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A trade bloc is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade, (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.1
Historic economic blocs include the Hanseatic League, a trading alliance in northern Europe in existence between the 13th and 17th centuries and the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871. Surges of trade bloc formation were seen in the 1960s and 1970s, as well as in the 1990s after the collapse of Communism. By 1997, more than 50% of all world commerce was conducted under regional trade blocs.2
Economist Jeffrey J. Scott of the Peterson Institute for International Economics notes that members of successful trade blocs usually share four common traits: similar levels of per capita GNP, geographic proximity, similar or compatible trading regimes, and political commitment to regional organization.3
Advocates of worldwide free trade are generally opposed to trading blocs, which, they argue, encourage regional as opposed to global free trade.4 Scholars and economists continue to debate whether regional trade blocs are leading to a more fragmented world economy or encouraging the extension of the existing global multilateral trading system.56
Trade blocs can be stand-alone agreements between several states (such as the North American Free Trade Agreement (NAFTA) or part of a regional organization (such as the European Union). Depending on the level of economic integration, trade blocs can fall into different categories, such as:7 preferential trading areas, free trade areas, customs unions, common markets and economic and monetary unions.
- List of preferential trade areas
- List of free trade areas (bilateral, multilateral)
- List of customs unions
- List of common markets
- List of economic unions
- List of monetary unions
- List of customs and monetary unions
- List of economic and monetary unions
|Trade bloc||Population||Gross domestic product (USD)||Members|
|Common markets, Economic and Monetary unions|
|Customs and monetary unions|
|Preferential trade areas and Free trade areas|
|Regional bloc||Free Trade Area||Economic and monetary union||Free Travel||Political pact||Defence pact||Other|
|Customs Union||Single Market||Currency Union||Visa-free||Border-less|
|EU||in force||in force7||in force2||in force 1||in force||in force
(Schengen 1, 7, NPU and CTA 1)
|in force||in force
(NATO 1, 7 and CFSP/ESDP 1)
|ESA 1, 7|
|EFTA||in force||in force2, 7||in force||in force 1, 7||in force 1, 7||ESA 1, 7|
|CARICOM||in force||in force||in force 1||in force 1 and
|in force 1||proposed||proposed||NWFZ|
|AU||ECOWAS||in force 1, 3||in force 1||proposed89||in force 1 and
proposed for 2012 1 and
|in force 1||proposed||proposed||in force||NWFZ1|
|ECCAS||in force1||in force1||proposed||in force1||in force||in force||NWFZ1|
|EAC||in force||in force||proposed for 2015||proposed for 201510||proposed||?||proposed for 2015||NWFZ1|
|SADC||in force1||in force1||proposed for 2015||de facto in force 1 and proposed common for 2016||proposed11||NWFZ1|
|COMESA||in force1||proposed for 2010||?||proposed for 2018||NWFZ1|
|Common||proposed for 2019||proposed for 2019||proposed for 2023||proposed for 2028||proposed for 2028||NWFZ1|
|UNASUR||MERCOSUR||in force||in force||proposed for 201512||in force||proposed for 201413||NWFZ|
|CAN||in force||in force 1||proposed114||in force||NWFZ|
|Common||proposed for 2014 4||proposed for not after 2019||proposed for 2019||proposed for 2019||in force15||proposed for 2019||proposed||in force||NWFZ|
|EurAsEC||in force1||in force1||proposed for 20121||Proposed16||in force17||in force 1|
|AL||GCC||in force||proposed for 201218||proposed||proposed 1||in force|
|Common||in force1||proposed for 2015||proposed for 2020||proposed||proposed19|
|ASEAN||in force 5||proposed for 201520||proposed 821||in force22||proposed for 201523||proposed for 202024||NWFZ|
|CAIS||in force1||proposed||?||in force1||in force1||proposed||NWFZ|
|NAFTA||in force||in force 1, 7|
|SAARC||in force 1, 6|
|PIF||proposed for 20211||NWFZ1|
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 Additionally some non member states also participate (the European Union, EFTA and NATO have overlapping membership and various common initiatives regarding the European integration).
8 Additionally some non member states also participate (ASEAN Plus Three)
- Schott 1991, 1.
- Milner 2002, 450.
- Schott 1991, 2.
- O'Loughlin and Anselin 1996, 136.
- Milner 2002, 458.
- Mansfield and Milner 2005, 330.
- Mansfield and Milner 2005, 333.
- cite ibid|http://en.wikipedia.org/wiki/East_African_shilling
- "Prensa Latina". Prensa Latina. February 3, 2007.
- "Definidos critérios para o Parlamento do Mercosul". Senado Federal - Notícias. February 3, 2007.
- Twelfth Andean Presidential Council Act of Lima
- "?". CNN. February 3, 2007.dead link
- GCC countries postpone customs union Nazarbayev proposed to create the SCO's reserve currency
- GCC countries postpone customs union move
- Yemen Proposes Replacing Arab League With Arab Union, Agence France-Presse, 11 February 2004
- "Asean Trade Mins Meet To Speed Up Plans For Single Market". Malaysia Dual Lingual Business News. February 3, 2007.
- "Envisioning a single Asian currency". International Herald Tribune. February 3, 2007.
- "ASEAN To Sign Accord On Visa-Free Travel". AHN - All Headline News. February 3, 2007.
- "ASEAN Leaders Sign Five Agreements at the 12th ASEAN Summit, Cebu, the Philippines, 13 January 2007" (Press release). ASEAN Secretariat. 2007-01-13. Retrieved 2007-01-28. "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."
- "ASEAN defense ministers aim for security community". ABS-CBN. February 3, 2007.
- Mansfield, Edward D. and Helen V. Milner, "The New Wave of Regionalism" in Diehl, Paul F. (2005). The Politics of Global Governance: International Organizations in an Interdependent World. Boulder: Lynne Rienner Publishers. ISBN 1-55587-654-4.
- Milner, Helen V., "International Trade" in Carlsnaes, Walter; Thomas Risse, Beth A. Simmons (2002). Handbook of International Relations. London: SAGE Publications. ISBN 0-7619-6304-9.
- O'Loughlin, John; Luc Anselin (1996). "Geo-Economic Competition and Trade Bloc Formation: United States, German, and Japanese Exports, 1968-1992". Economic Geography 72 (2): 131–160. doi:10.2307/144263. JSTOR 144263.
- Schott, Jeffrey J. (1991). "Trading blocs and the world trading system". World Economy 14 (1): 1–17. doi:10.1111/j.1467-9701.1991.tb00748.x.