Definition :

Regional trade blocks are intergovernmental associations that manage and promote trade activities for specific regions of the world

They have political as well as non-political implications for example the European union , the worlds largest trading block has harbored political ambitions. The Maastricht treaty which gave birth to EU calls for joint policies in regard to military , defense, and citizenship

Major Trade Blocks

EU - European Union NAFTA - North American Free Trade Agreement SAFTA - Singapore American Free Trade Agreement OPEC - Organization Of Petroleum Exporting Countries ASEAN - Association Of South East Asian Nation SAARC - South Asian Association Of Regional Co-operation

Debate On Trading Blocks

There are two views :
1. Analyst like Ernest Preeg argue that trade blocs are desirable because they compliment global trade. 2. Other analyst argue that trade blocs are not desirable because they are threat to free trade and need to protectionism

Why Trade Blocs Are Desirable

1. Trade blocs compliment global trade

2. They protect intra regional trade form outside forces. 3. They establish regional security.

Why They Are Undesirable

1. Import quotas(limiting the amount of imports into the country so that domestic consumers buy products made by their countries in their region). 2. Custom delays (establishing bureaucratic formalities that slow down trade from the other region) 3. Subsidies barrier (giving heavy subsidies to protect regional trade ) 4. Voluntary boycotts and technical barriers.

SAARC
(SOUTH ASIAN ASSOCIATION FOR REGIONAL COOPERATION)

The South Asian Association for Regional Cooperation (SAARC) was established when its Charter was formally adopted on December 8, 1985 by the Heads of State or Government of Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan and Sri Lanka. SAARC provides a platform for the peoples of South Asia to work together in a spirit of friendship, trust and understanding. It aims to accelerate the process of economic and social

development in Member States.

SAARC - Objectives
to promote the welfare of the people of South Asia and to improve their quality of life; to accelerate economic growth, social progress and cultural development in the region and to provide all individuals the opportunity to live in dignity and to realize their full potential; to promote and strengthen selective self-reliance among the countries of South Asia; to contribute to mutual trust, understanding and appreciation of one another's problems; Contd..

SAARC Objectives contd..

to promote active collaboration and mutual assistance in the economic, social, cultural, technical and scientific fields; to strengthen cooperation with other developing countries; to strengthen cooperation among themselves in international forums on matters of common interest; and to cooperate with international and regional organizations with similar aims and purposes.

SAARC - features
The progress of SAARC in intra-regional trade is non-significant Despite of geographic proximity among SAARC nations, the intra-SAARC exports are mere 5 % of the total exports of the region. Compared to this intra-bloc trade for other blocs is as follows
EU NAFTA ASEAN 55.2% 51.7% 20.4%

SAARC has been a sheer failure. The reason being political dispute between member countries

Thank You