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A trade bloc is a large free trade area or free trade area formed by one or more tax, tariff and trade agreements. Typically trade pacts that define such a bloc specify formal adjudication bodies, e.g. NAFTA trade panels. This may include even a more democratic and participative system, as the EU and its parliament.

Particularly since the demise of most of the world's empires, a number of international—generally regionally based—economic blocs have been developed to promote trade between member states.

Several blocs also have stated or implicit political goals—notably the EU. Varieties of economic blocs include free trade areas, customs unions, single markets, and economic and monetary unions.

One of the first economic blocs was the German Customs Union (Zollverein) initiated in 1834, formed on the basis of the German Confederation and subsequently German Empire from 1871.

A trade bloc is established through a trade pact (or pacts) covering different issues of the economic integration.

Most active regional blocs

It is possible that a country is member of two (or more) different blocs. To avoid overlapping for this classification such countries are only included in the most active of the blocs in question. The "activity" of each block is measured by the following three criteria:

  • to have greater real practical achievements (not only declarations that are not followed by actual actions by its members)
  • to have more recent (or regular) activities (meetings, new agreements, other internal procedures)
  • to have more ambitious plans for future integration and a tighter timescale for it.

Also a country may be classified here as part of the less active regional bloc if the country itself is more active in it; Venezuela, for example, is a member of both the Andean Community and Mercosur. While Mercosur is a more active bloc than the Andean Community, Venezuela itself is much more active in the Andean Community than in Mercosur. Therefore Venezuela is assigned to the Andean Community for the purpose of this classification. (This is only an example. So, note, that Venezuela is planning to completely integrate with Mercosur by 2010).

Priority is given to such regional blocs that have ambitions for integration in more spheres than just economy (i.e. political, defence and other spheres). Sometimes activities are divided between different (but related) blocs with small deviations in membership (e.g. NATO and EU members are almost the same).

Some colors on the map are used multiple times for different blocs. A darker color means full member; a lighter color means associate state, observer state, prospective member, candidate, acceding state or a similar status.

European Union (EU)

Caribbean Community (CARICOM)

Economic Community of West African States (ECOWAS)

Economic and Monetary Community of Central Africa (CEMAC)

East African Community (EAC)

South American Community of Nations (CSN)

Gulf Cooperation Council (GCC)

Southern African Customs Union (SACU)

Common Market for Eastern and Southern Africa (COMESA)

North American Free Trade Area (NAFTA)

Association of Southeast Asian Nations (ASEAN)

South Asian Association for Regional Cooperation (SAARC)

Eurasian Economic Community (EurAsEC)

Agadir Agreement

Central American Common Market (CACM)

Cooperation in the framework of the bloc currently stalled and status in light of DR-CAFTA is unclear

Pacific Regional Trade Agreement (PARTA of PIF)

African Economic Community (AEC)

Under the umbrella of the African Union it is expected that ECOWAS, CEMAC/ECCAS, SACU/SADC, COMESA/IGAD and EAC will join into a common African Economic Community in 2019.

Other states or entities

  • Arab States:
    • Iraq: aiming at GCC membership, but also possibility for Agadir
    • Palestine: problems with status, prospective member for Agadir
    • Sahrawi Republic: problems with status, member of the African Union, general possibility for Agadir

  • Latin America:
    • Cuba: mostly isolated because of political system, possibility for CARICOM or CACM
    • Panama: US dollar serves as parallel legal tender, possibility of engaging with CSN or CACM

Comparison between regional blocs

Activities
Regional bloc Free Trade Area Customs Union Economic and monetary union Free Travel Political pact Defence pact Other
Single Market Currency Union Visa-free Border-less
EU in force 2 in force in force in force 1 in force in force
(Schengen 1 and CTA 1) 		in force in force
(NATO 1 and CFSP/ESDP 1) 		ESA 1
CARICOM in force in force in force 1 in force 1 and
proposed common 		in force 1 ? proposed
ECOWAS in force 1, 3 in force 1 ? in force 1 and
proposed for 2009 1 and
proposed common 		in force 1 proposed proposed in force
CEMAC in force in force proposed in force proposed ? in force
EurAsEC proposed proposed proposed in force * in force 1
EAC in force in force proposed for 2009 proposed ? proposed for 2010
CSN MERCOSUR in force in force ? in force
CAN in force in force 1 ? in force
Common proposed for 2014 4 proposed for not after 2019 proposed for 2019 proposed for 2019 proposed for 2019 ? proposed for 2019
GCC in force in force proposed for 2007 proposed for 2010
SACU in force in force proposed for 2012 de-facto in force 1 and proposed common for 2016 proposed *
COMESA in force 1 proposed for 2008 ? proposed for 2025
NAFTA in force
ASEAN in force 5 ? proposed ? proposed for 2020
SAARC in force 6
Agadir in force
CACM proposed proposed
PARTA
AEC
(for reference) 		proposed for 2019 proposed for 2019 proposed for 2023 proposed for 2028 proposed for 2028
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

See also

References

Trade blocs | Lists of organizations | Treaties | International trade

Liste internationaler Organisationen im Bereich der Wirtschaft | Communauté économique | Integração entre países | Listă a organizaţiilor internaţionale în domeniul economiei

 

This article is licensed under the GNU Free Documentation License. It uses material from the "Trade bloc".

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