Regional Trade Blocks

REGIONAL TRADE BLOCKS REGIONAL INTEGRATION Free Trade Area  No Barriers To Trade of Goods and Services Among Member Countries  No Discrimination of Quota, Tariff, Subsidies Among Member Countries  Member Countries Can Decide Own Policies for Non-member Countries  Variable Tariffs By Each Member Country On Same Products Imported From Non-member Countries

REGIONAL TRADE BLOCKS REGIONAL INTEGRATION Customs Union  Step Towards Economic and Political Integration  No Barriers To Trade of Goods and Services Among Member Countries  Common External Trade Policy Among Member Countries  Administrative Mechanism To Oversee Trade Relations With Non-members

REGIONAL TRADE BLOCKS REGIONAL INTEGRATION Common Market  Similar To Customs Union  No Barriers To Trade of Goods and Services Among Common and Same External Trade Policy  Free Movement of Factors Like Labour and Capital  No Restrictions on Immigration and Capital Movements

REGIONAL TRADE BLOCKS REGIONAL INTEGRATION Economic Unions  Closer Economic Integration and Cooperation Than Common Market  No Barriers To Trade of Goods and Services Among Common and Same External Trade Policy and Free Movement of Factors Like Labour and Capital  Common Currency, Hormonisation of Tax Rates and Common Fiscal & Monetary Policy. A Step Towards Political Union

REGIONAL TRADE BLOCKS NAFTA  January 1994  USA, Canada, Mexico  Worlds Largest Free Trade Area  Increased Trade and Investments  Tariff and Non-tariff Elimination  Will Include South American Countries

REGIONAL TRADE BLOCKS NAFTA 

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Pact to Eliminate Barriers for 10,000 Products for Trade Between Member Countries Pact to Benefit Over 380 million Consumers Implementation Over a Period of 15 Years

REGIONAL TRADE BLOCKS NAFTA Goals  Strengthen Bond of Friendship & Cooperation  Catalyst for International Ccoperation  Create, Expand and Secure Future Markets  Establish Fair Rule of Trade  Establish Predictable Framework for Business Planning

REGIONAL TRADE BLOCKS NAFTA Main Characteristics & Benefits  Increased Jobs and Demand for Local Products  Expand Trade Liberalisation in the Region  Elimination of Tariffs and Adjustment Period of 15 Years for Some Products  IPR – Higher Levels of Protection  GATT Principle of Non-discrimination

REGIONAL TRADE BLOCKS NAFTA Main Characteristics & Benefits  US gained by Export of Agriculture Products  Mexico Imported Worth $8.5 b in 2004  Canada Imported Worth $9.6 b and is Second Largest Market for US Agriculture Products  Incredible Flow of Trade and Investments in Member Countries During First 10 Years

REGIONAL TRADE BLOCKS NAFTA India and NAFTA Countries  USA – Largest Business Partner of India  India – Preferred Destination for Auto Parts  Canada – Imports Electronics and Software  Mexico – Focused Destination, Fastest Growing Country  Proximity to Latin America and Member of NAFTA

REGIONAL TRADE BLOCKS NAFTA NAFTA & WTO  Regionalisation May Harm WTO  Regionalisation Has Helped Mexico  There are No Indications That Regionalisation is Harmful For Economic Growth  NAFTA is Complementary To WTO

REGIONAL TRADE BLOCKS EUROPEAN UNION Power Center in Global Economy  Second Largest Economy  26.6% Share to Global GDP, US Share 32.5%, Japan Share 12.2%  Block of 25 Countries, Population over 450 m  31.1% Share to Merchandise Global Exports, US Share 11.1%  $3300 b Merchandise and $712 b Services in 2004

REGIONAL TRADE BLOCKS EUROPEAN UNION Power Center in Global Economy  Major Player in Capital Markets – Lending and Investments  Most Important Source of FDI in the World  48 Out of 100 Largest Assets Are In EU  70% Global M&A Are of EU MNCs  Major Banking Activities in the East

REGIONAL TRADE BLOCKS EUROPEAN UNION Vision  The Most Competitive and Knowledge Based Economy In The World By 2010Capable of Sustainable Economic Growth, With More and Better Jobs and Greater Social Cohesion Lisbon Strategy 2002

REGIONAL TRADE BLOCKS EUROPEAN UNION Background  Headquarters in Brussels  Established on Nov 1, 1993  Started As European Coal & Steel Community in 1951  Became European Community in 1967  12 Members Signed Treaty of EU  In 2004 – 25 Member Countries

REGIONAL TRADE BLOCKS EUROPEAN UNION Objectives Promote and Expand Cooperation       

Economics Trade Social Issues Foreign Policy Security Defence Judicial Matters

REGIONAL TRADE BLOCKS EUROPEAN UNION Objectives  Common Commercial Policy  Reducing Economic Differences Between Richer and Poorer Members  Stabilising Currencies of Its Members

REGIONAL TRADE BLOCKS EUROPEAN UNION Beliefs  Economic Motives Rests on Larger Markets Leads To More Competition  Greater Productivity & Higher Standards of Living  Economic Strength Is Basis For Political and Military Power  Reduction of Conflict Between The Nations

REGIONAL TRADE BLOCKS EUROPEAN UNION Single Market and Common Commercial Policy  Competition Policy Prevent Price Fixing, Collusion and Abuse of Monopoly 

Free Movement of Goods

Customs Union, Common Tariff For Imports From Nonmembers 

Free Movements of Persons

Work and Live in Member Countries

REGIONAL TRADE BLOCKS EUROPEAN UNION Single Market and Common Commercial Policy  Services Right to Provide Services In Member Countries 

Capital

No Restrictions on Movements of Capital 

Taxation

VAT Not Less Than 15%

REGIONAL TRADE BLOCKS EUROPEAN UNION Trade Policy  Progressive Liberalisation of Trade Leading to Gradual Opening of Markets   

Free Access to External Markets Fair Competition Respect of WTO Commitments

REGIONAL TRADE BLOCKS EUROPEAN UNION The Lisbon Agenda of EU – 2000  Sustain Economic Growth By Taking Advantage of Common Market Opportunities & Reduction in Barriers  Promote Entrepreneurship in Energy, Transport, Postal, Financial Services By Reducing State Aid  Reduction in Administrative & Tax Burdens  Education and Pension System Reforms

REGIONAL TRADE BLOCKS EUROPEAN UNION India and EU  India recognised EU in 1962  EU is Largest Trading Partner and Source of FDI  India is EU’s 17th Largest Supplier and 20th Largest Export Destination, in Value Terms  High Import Duty in India  High Standards, a Barrier for Indian Exporters

REGIONAL TRADE BLOCKS EUROPEAN UNION India and EU – Bilateral Agreements  Agreement on Sugarcane Exports to EU, at Guaranteed Price  Administrative Agreement on Textile Trade Management of Quotas and Reduction in Tariff  Cooperation Agreement Agreement on Trade, Economic Cooperation, Environment, Agriculture, Tourism, IPR

REGIONAL TRADE BLOCKS EUROPEAN UNION India and EU – Bilateral Agreements  Science and Technology Agreement Covers Health, Agriculture and Natural Resources Allows Access to Indian Researchers to EU’s Programme of Research and Technologigy Development  Customs Cooperation Agreement Simplify Customs Procedures as per Intl. Standards

REGIONAL TRADE BLOCKS ASEAN Formation  August 8, 1967, Signed at Bangkok  Signatories Thailand Indonesia Malaysia Singapore Philippines

REGIONAL TRADE BLOCKS ASEAN Objectives  Accelerate Economic Growth, Social Progress and Cultural Development  Spirit of Equality and Partnership for Prosperity in The Region  Promote Peace and Stability, Respect to Other Nations as per Charter of UN

REGIONAL TRADE BLOCKS ASEAN Declaration  Collective Will of the Nations to Bind Themselves Together in Friendship and Cooperation and Through Joint Efforts and Sacrifices. Secure for Their People and For Posterity the Blessings of Peace, Freedom and Prosperity

REGIONAL TRADE BLOCKS ASEAN Fundamental Principles The Treaty of Amity and Cooperation in SE Asia Signed on February 24, 1976 

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Mutual Respect for the Independence, Sovereignty, Equality, Territorial Integrity and National Identity of All Nations The Right of Every State to Lead Its National Existence Free From External Interference, Subversion or Coercion

REGIONAL TRADE BLOCKS ASEAN Fundamental Principles  Non-interference in The Internal Affairs of Other Member Nations  Peaceful Settlements of Difference or Disputes  Renunciation of The Use of Threats or Force  Effective Cooperation Between Themselves

REGIONAL TRADE BLOCKS ASEAN Agreements With India  Signed on October 8, 2003  Agreement to Create Indo ASEAN Free Trade Area By 2011  Agreement to Counter Terrorism 

India Becoming Signatory To ASEAN Treaty of Amity and Cooperation

REGIONAL TRADE BLOCKS ASEAN Trade Opportunities in ASEAN Countries  Tourism  Open Sky Policy  Indian Film Industry  BPO  Other Areas Like Auto Parts, Natural Resources

REGIONAL TRADE BLOCKS ASEAN Trade Opportunities in ASEAN Countries  Tourism  Open Sky Policy  Indian Film Industry  BPO  Other Areas Like Auto Parts, Natural Resources