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The RTBs are thus historically known for promoting trade within a region by reducing or eliminating tariff among the member countries.
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TYPES OF TRADE BLOCS FREE
Regional Trade Blocs or Regional Trade Agreements (or Free Trade Agreements) are a type of regional intergovernmental arrangement, where the participating countries agree to reduce or eliminate barriers to trade like tariffs and non-tariff barriers. Many RTBs like the TPP would like to make advanced level trade liberalisation and hence they are not satisfied with the slow pace of trade liberalisation within the WTO. Recently formed Trans Pacific Partnership (TPP) shows this increasing affinity towards RTBs. Though many regional trade agreements like the EU, NAFTA and ASEAN were established before or around the time of WTO’s formation, there is mushrooming of RTBs in recent years. These regional trade promoting arrangements advocate more tariff cuts and removal of other restrictions within the group while maintaining restrictions against the rest of the world. This has led to interest in trade liberalisation within a limited number of countries that may be regionally close together. But the history of WTO led trade liberalisation shows that the organisation is facing difficulty in bringing further trade liberalisation because of conflicting interest among large number of countries. The WTO that contains 162 countries is the most popular one a truly multilateral forum for trade liberalisation. As their name suggests these RTBs/FTAs are arrangements aimed for faster trade liberalisation at regional levels.Ĭountries are convinced that trade is an engine of growth and they are searching for arrangements that promote trade. Regional Trading Blocs and Economic Integrationįrom Asia’s Rise in the New World Trade Orderįrom What is Regional Trade Blocs or Free Trade Agreements?Īs trade integration across countries is intensifying, we hear more and more about Free Trade Agreements (FTAs) and Regional Trade Blocs (RTBs).