Trading Blocs Essay - 1876 Words

Trading Blocs Nowadays, the world is increasingly divided into trade blocs. Two types of trading blocs are recognized by the WTO : the free trade areas, where member states have removed all tariff barriers between them but where each member states can set its own tariffs on imports from non member countries ( EFTA, NAFTA, ASEAN, APEC) and the customs union, where countries agree on common tariffs from non members and remove all trade barriers between them ( like the EU, the Southern Common Market MERCOSUR formed by Argentina, Brazil, Paraguay and Uruguay). However there are also the common market in which members allow full freedom of factors flows (migration of labour and capital) among themselves in addition to having a†¦show more content†¦For example, African countries are not among the trade blocs’ members. When there is a trade bloc, priority is given to the imports coming from the member states of the trade bloc. Consequently, the market is not easy to accede for a non member state. As a matter of fact, the European market is easier to tap for a European Union member state than for a non-member state country that is why the member state countries prefer trading with the member of their customs union and push back the other countries of the world even if there are sometimes cheaper. For example, France is a member state of the EU who is first partner and its major source of surplus. French exchanges out of the union are relatively concentrated so that eighty percent of the French trade with the industrialized countries is destinated toward OCDE countries including sixty three percent toward EU countries. As far as agriculture is concerned, we can notice that it is hard for countries that are not members of the European Union to sell their products because EU products are subsidized. 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