Trade bloc - a free trade area in several countries adhering to one or more agreements on taxes, tariffs and trade. Usually trading blocs have their administrative authorities and regulatory bodies. Some trade blocs also put political goals. There are many types of trading blocs among which are:
· Free trade zone - the type of international integration, in which the countries participating canceled customs duties, taxes and fees, as well as quantitative restrictions in mutual trade, in accordance with an international agreement;
· Customs union - an agreement between two or more states (form mezhdugosudarstvennogo agreement) on the abolition of customs duties on trade between them, a form of collective protection from third countries. Customs union plans to the formation of "a single customs territory,"
· Common Market - a form of economic integration, which implies the free movement of goods, works and services, and factors of production - capital, labor - across the borders of countries that are members of the Common Market,
· Economic Union - a type of trading blocs, characterized by the following features: 1) the elimination of customs duties on trade within the Union, a form of collective protection from third countries, and 2) the existence of agreements on the free movement of other factors of production, that is, financial and human capital; 3) The existence of agreements on the harmonization of fiscal and monetary policy.
· Economic and Monetary Union - a type of trading blocs, characterized by the following features: 1) the elimination of customs duties on trade within the Union, a form of collective protection from third countries, and 2) the existence of agreements on the free movement of other factors of production, ie, capital and labor forces, and 3) the existence of agreements on the harmonization of fiscal and monetary policy, and 4) the existence of supranational governance and implementation of a unified macroeconomic policy.
Trading bloc based by adopting trade agreement (or agreements) defining the various issues of economic integration.
Significant changes in world trade in the second half of the XX century, contributed to the new developments in its international organization. Among these phenomena is the so-called regionalism, ie, the agreement is especially close cooperation of individual countries by type of free trade areas, customs unions. According to the World Bank within the framework of such zones is about half of world trade.
Among the most famous zones of the European Free Trade Association, the European Union, the North American Free Trade Area, the Organization of Asia-Pacific economic cooperation, etc.
The compositions of the nine major international and regional trading blocks are as follows:
1. The European Union (EU) - Austria, Germany, UK, Italy, Ireland, France, Spain, Portugal, Finland, Sweden, Denmark, Belgium, Luxembourg, the Netherlands, Greece. May 1, 2004 included in the EU: Cyprus, Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia, Czech Republic, Estonia. January 1, 2007 joined the EU: Bulgaria, Romania.
2. The North American Free Trade Agreement (NAFTA) - the U.S., Canada, Mexico.
3. The European Free Trade Association (EFTA) - Iceland, Norway, Switzerland, Liechtenstein.
4. Asia-Pacific Economic Cooperation (APEC) - Australia, Brunei, Malaysia, Singapore, Thailand, New Zealand, Papua New Guinea, Indonesia, the Philippines, Taiwan, Hong Kong, Japan, South Korea, China, Canada, USA, Mexico, Chile, Peru, Russia, Vietnam.
5. Mercosur - Brazil, Argentina, Paraguay, Uruguay, and Venezuela (from July 2006 started the procedure of entry, yet so far parliaments of all members of the union have agreed to accept Venezuela's terms), and as associate members - Chile, Bolivia, Colombia, Ecuador and Peru are also held consultations on expanding cooperation with Cuba.
6. Southern African Development Community (SADC) - South Africa, Botswana, Lesotho, Swaziland, Namibia, Zimbabwe, Angola, Mozambique, Malawi, Madagascar, Tanzania, Zambia, Mauritius, the Democratic Republic of Congo.
7. West African Economic and Monetary Union (UEMOA) - Ivory t'Ivuar, Burkina Faso, Nigeria, Togo, Senegal, Benin, Mali, Guinea-Bissau.
8. South Asian Association for Regional Cooperation (SAARC) - India, Pakistan, Sri Lanka, Bangladesh, Maldives, Bhutan, Nepal, Afghanistan (April 2007).
9. Andean Pact - Colombia, Ecuador, Peru, Bolivia, Venezuela (out of the community April 22, 2011).
By forming these blocks lead the objective processes of political, economic, historical character.
The formation of free trade does not make any fundamental changes in the world economy. Activation of these processes on the one hand promotes international trade (within the zones, blocks, regions), and on the other - it creates a number of obstacles inherent in any more or less closed formation.
In particular, the establishment of preferential tariffs under a regional association leads to the fact that trade is inefficient. This process is characterized in international practice as "trade deflection." For best results, the country should follow the principle of "comparative advantage." So, if the U.S. imports Mexican goods just because they allowed duty-free imports, despite the fact that Malaysia or Taiwan have a comparative advantage in the production of certain goods over the Mexican, the trade will undoubtedly become less effective. In this scope "trade diversion" can be quite substantial.
The decisive criterion for the assessment of regional agreements is that, as far as they spend a significant difference between Member Agreement and the states that these agreements are not involved. International experience shows that high external tariffs, such as Mercosur lead to the fact that Argentina, Brazil, Paraguay and Uruguay import goods from each other, even if they would have been cheaper to buy them somewhere else.
The grouping of countries into economic blocs does not mean unconditional progress in implementing the ideas of free trade or surrender to protectionist principles. The dilemma of "free trade" and protectionism does not cease to exist. It is transferred to a different level of trade relations, which is determined by the decision on the choice of economic policy of states in relation to third countries. Typically, even within individual economic and trade groupings there are contradictions between some countries and grows in the so-called "trade war" (such as cod, grape, oil "war" between the EU Member States).
By the end of the 90s there is a transition from a "trade war" to foreign economic. If a trade war take the form of austerity measures aimed at counteracting or promotion of export expansion with the help of government regulation (tariff, non-tariff quotas, licensing, taxation, etc.), then in foreign combat use different techniques and methods of competition.
First of all, I mean the desire to control key sectors of the economy of a country by exporting goods to the prepared for this infrastructure. And as a result - a threat to their "rejection" or the subsequent expansion of exports of related products and objects.
The final step is to "credit blow" pumping of national income, etc.
On the way to a single global system of the world market is still a lot of obstacles and conflicts of interest that arise in the course of interaction of individual countries and trade-economic groups with each other.
Participating countries trade blocs, understanding the complexity and contradictions of the current situation on the world market, seek to find ways for positive solutions of problems and contradictions.
Regional trade groups, according to the World Trade Organization agreed to relax its control mechanisms within the international trade and hamper global economic integration. In this regard, the WTO advocates the adoption of a single set of rules governing the conditions for the creation of trading blocs. Thus, trade policy, trade blocs participants must be compatible with WTO rules and agreements - open to the accession of other countries.
Former Director General of the World Trade Organization called on governments R. Ruggiero of WTO member countries to promote the development of the multilateral trading system.
This, in his opinion, is not as important as the establishment of regional systems. It is assumed that a global free trade zone can be achieved by the year 2020, however it must be done