Trade Blocks, Reginal Economic Intigration

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Information about Trade Blocks, Reginal Economic Intigration
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Published on November 23, 2009

Author: sikanderkush

Source: slideshare.net

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This PPT explain the trade block

 

Trade Policy International trade policies deal with the policies of national governments relating to export and import of various goods and services to various countries either equal terms of condition or discriminatory terms of conditions. 11/23/09 Xavier institute- XIDAS

International trade policies deal with the policies of national governments relating to export and import of various goods and services to various countries either equal terms of condition or discriminatory terms of conditions.

India Trade policy Trend Till the early 1990s, India was a closed economy; Average tariffs exceeded 200 percent,  Quantitative restrictions on imports were extensive; There were stringent restrictions on foreign investment; country began to cautiously reform in the 1990s; India’s trade to GDP ratio has increased from 15 percent to 35 percent of GDP between 1990 and 2005; India has recently signed Regional and Bilateral Trade Agreements. 11/23/09 Xavier institute- XIDAS

Till the early 1990s, India was a closed economy;

Average tariffs exceeded 200 percent, 

Quantitative restrictions on imports were extensive;

There were stringent restrictions on foreign investment;

country began to cautiously reform in the 1990s;

India’s trade to GDP ratio has increased from 15 percent to 35 percent of GDP between 1990 and 2005;

India has recently signed Regional and Bilateral Trade Agreements.

Objective of Int. trade policy From To protect the domestic industry; and To build competency of domestic industry. To accumulate foreign exchange. To Optimization of scare resources. Consumer benefit. Market Access. 11/23/09 Xavier institute- XIDAS

From

To protect the domestic industry; and

To build competency of domestic industry.

To accumulate foreign exchange.

To

Optimization of scare resources.

Consumer benefit.

Market Access.

Objective of Indian trade policy To double the percentage share of  global merchandise trade  within the next five years. To act as an effective instrument of  economic growth  by giving a thrust to employment generation. 11/23/09 Xavier institute- XIDAS

To double the percentage share of  global merchandise trade  within the next five years.

To act as an effective instrument of  economic growth  by giving a thrust to employment generation.

Protectionism Vs Free trade A/C to Adam Smith , “ Free trade is the system of commercial policy which draws no restriction between domestic and foreign commodities and , therefore neither impose burden on latter, nor grants any special favor to the former”. Protectionism  is the economic policy of restraining trade between states, through methods such as tariffs on imported goods, and giving subsidy to domestic industry. 11/23/09 Xavier institute- XIDAS

A/C to Adam Smith , “ Free trade is the system of commercial policy which draws no restriction between domestic and foreign commodities and , therefore neither impose burden on latter, nor grants any special favor to the former”.

Protectionism  is the economic policy of restraining trade between states, through methods such as tariffs on imported goods, and giving subsidy to domestic industry.

Instrument of Int. Trade policy 11/23/09 Xavier institute- XIDAS

Why Trade policy? Political Argument National security; Protecting industry; Protecting jobs; and Retaliation; Economic Argument Infant industry; and strategic trade policy. 11/23/09 Xavier institute- XIDAS

Political Argument

National security;

Protecting industry;

Protecting jobs; and

Retaliation;

Economic Argument

Infant industry; and

strategic trade policy.

Shift from protectionism to free Trade Protectionism leads to inefficiency in domestic industry. Customer are paying more price to the domestic product due to inefficiency. Hence, moving from protectionism to free trade, trade block work as a intermediary. 11/23/09 Xavier institute- XIDAS

Protectionism leads to inefficiency in domestic industry.

Customer are paying more price to the domestic product due to inefficiency.

Hence, moving from protectionism to free trade, trade block work as a intermediary.

Bilateral Trade Bilateral Trade Agreements are between on two nations at a time. They are fairly easy to negotiate, and give those two nations favored trading status between each other. 11/23/09 Xavier institute- XIDAS

Bilateral Trade Agreements are between on two nations at a time. They are fairly easy to negotiate, and give those two nations favored trading status between each other.

Multilateral trade Multilateral trade agreements are between many nations at one time. For this reason, they are very complicated to negotiate, but are very powerful once all parties sign the agreement. 11/23/09 Xavier institute- XIDAS

Multilateral trade agreements are between many nations at one time. For this reason, they are very complicated to negotiate, but are very powerful once all parties sign the agreement.

Status of Indian Trade Agreement 11/23/09 Xavier institute- XIDAS INDIA'S TRADE AGREEMENTS AT A GLANCE Existing Ongoing FTAs /PTAs under Study and Consideration Bankok Agreement Global System of Trade Preferences (GSTP) SAARC Preferential Trading Agreement (SAPTA) India-Sri Lanka FTA India - Thailand FTA India Singapore Comprehensive Economic Cooperation (CECA) Indo-Nepal Trade Treaty India-Mauritius PTA India-Chile PTA Indo-ASEAN CECA South Asian Free Trade Agreement (SAFTA) BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical & Economic Cooperation) India - MERCOSUR PTA Gulf Cooperation Council (GCC) China South Korea Japan Malaysia Pakistan Southern African Customs Union (SACU) Egypt Israel Russia Australia Source: http://www.indianindustry.com/trade-information/trade-agreements.html

Bankok Agreement

Global System of Trade Preferences (GSTP)

SAARC Preferential Trading Agreement (SAPTA)

India-Sri Lanka FTA

India - Thailand FTA

India Singapore Comprehensive Economic Cooperation (CECA)

Indo-Nepal Trade Treaty

India-Mauritius PTA

India-Chile PTA

Indo-ASEAN CECA

South Asian Free Trade Agreement (SAFTA)

BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical & Economic Cooperation)

India - MERCOSUR PTA

Gulf Cooperation Council (GCC)

China

South Korea

Japan

Malaysia

Pakistan

Southern African Customs Union (SACU)

Egypt

Israel

Russia

Australia

Trade Blocks A  trade bloc  is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade (tariffs and non-tariff barriers) are reduced or eliminated among the participating states. 11/23/09 Xavier institute- XIDAS

A  trade bloc  is a type of intergovernmental agreement, often part of a regional intergovernmental organization, where regional barriers to trade (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.

Level of Economic Integration 11/23/09 Xavier institute- XIDAS

Complexity with integration 11/23/09 Xavier institute- XIDAS

Benefit or Loss from Trade Block 11/23/09 Xavier institute- XIDAS

Cont.. 11/23/09 Xavier institute- XIDAS With no trade With trade bloc With free trade Price and Quantity Pz Q1 Pz+sa, Qz+sa Pw Trade Creation - EAB DAC Trade Diversion ADC BFC -

NAFTA- FTA 11/23/09 Xavier institute- XIDAS

Custom Union- Andean Community 11/23/09 Xavier institute- XIDAS

Common Market 11/23/09 Xavier institute- XIDAS

Economic Union & Political Union 11/23/09 Xavier institute- XIDAS

Thank You 11/23/09 Xavier institute- XIDAS

Thank You

11/23/09 Xavier institute- XIDAS

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