• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Examine the causes and consequences of the emergence of large trading blocs in recent years.

Extracts from this document...


A-level Geography -Trading Blocs (a) What is meant by the term trading bloc? [5] A trading bloc is defined as a group of countries which combined together share trade agreements. There are two types of trade agreements partaken in by the members of these blocs. The first types of agreements are internal free trade agreements which promote trade between member countries by the removal of protectionist. This encourages trade within the bloc by lowering the internal trade costs. The second types are agreements which restrict trade outside of the bloc by imposing protection such as tariffs on foreign trade. These discourage trade with countries outside the bloc as these polices raise the cost of this trade. There are a large number of trading blocs spanning over the different areas of the globe. The two largest in terms of GDP per head in $ are the EU and NAFTA. The EU is the European Union which is a grouping of the countries of Europe and NAFTA also known as the North American Free Trade Association which is a grouping of the USA, Canada and Mexico. The presence of trading blocs encourage countries to buy good available within the bloc from the bloc's countries due to lower costs and only trade outside of the bloc goods which are not available at a cheaper price within. ...read more.


One of the largest causes for the emergence of so many trading blocs across the globe is the factor that countries not in trade blocs join or create others in the aim of countering the world economic power share which is being controlled by member countries of trade agreements. This factor is one of the main reasons for the creation of the world's second largest trade bloc NAFTA. The countries of the north and Central American continent who felt threatened by the great and growing economic power of the EU decided to join together in a pact of trade agreements so they as well could gain the benefits of regional free trade. The EU was the first large trade bloc to emerge but its demonstration of the power a bloc can have has threatened many major economic powers and this threat has lead to the creation of many new trading blocs. The emergence of trading blocs has had good and bad effects on the world trade and more regional environments of the world. A major good consequence of the emergence of blocs is that much trade has been created by their presence. This though is not without problems as though overall trade for the member countries is increased those outside the bloc often divert their trade from the area or lose customers from within as members find cheaper alternatives from member leading to damage to external countries economies and overall trade between different regions of the world. ...read more.


this country to become prosperous and begin to use resources which were not before used and therefore make resource use more efficient thought the whole area. Again this factor could be more effective in world terms if not blocked by barriers between trade blocs. Overall trading blocs have recently emerged throughout the world recently for many reasons, many which are orientated around the benefits brought about my free trade and other which are based around other factors such as political stability. These blocs have many advantages and disadvantages. The advantages are as varied as the causes but there are still many based around the presence of free trade. The disadvantages of these blocs are again varied but many are based around the problem that though a trading bloc encourages the advantages of free trade it only does this to a point as they will in the end in my view hinder the progress towards free trade as protectionist barriers between blocs will replace those between countries which before caused problems. In my view though trading blocs are a good thing for world trade and the countries of the world as when full efficiency is reached within them I believe that there will be a move to break the barriers of protection between the blocs and a move towards global free trade which will cause global efficiency and a raise in the worlds living standards. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level UK, European & Global Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level UK, European & Global Economics essays

  1. Where does the World Trade Organisation fit in the overall scheme of international public ...

    The EU, however, shows no signs of significant movement. The prospects for a political breakthrough in the agricultural negotiations, upon which the future of the whole round hinges, appear depressingly remote at the moment. Services The General Agreement on Trade in Services (GATS)

  2. Will trading fairly reduce world poverty?

    For the technology of the time, India had a very advanced textile industry. By the end of the nineteenth century, India was now part of its empire. In order to help mill owners in Lancashire, the government put a heavy import tax on Indian cloth.

  1. Why has GDP growth been so slow in Somalia?

    High density development results in significant savings to the government by reducing both the capital and operating costs of police, fire and waste collection and disposal services. Infrastructure may also be cheaper. For every rural community there must be a school and medical centre (or hospital, depending on the size of the community)

  2. Is Mexico better off with NAFTA

    Even so, there may be other factors that led to the increase in Mexican trade; the "Tequila Crisis" resulted in the collapse of the Mexican peso and Mexico signing the GATT agreement in 1986 led to unilateral reduction of tariffs.

  1. trading blocs

    For example, African countries are not among the trade blocs' members. When there is a trade bloc, priority is given to the imports coming from the member states of the trade bloc. Consequently, the market is not easy to accede for a non member state.

  2. Examine the roles and place of trade blocs in the global economy.

    or foreign countries, which has increased the bargaining power of the EU, since it now represents around 390 million customers and thousands of businesses. The free movement of people exists in the EU, as there is now a common European passport for all EU citizens, however airports and other entry

  1. Carbon Credit Trading

    As the CEO of Heinz, and as the primary decision maker of that company, we send you this short report on the matter with the hopes that you will take the necessary actions. In this report, we mainly examine the carbon trade relationship of the E.U. and the United States.

  2. Assess the economic effects of the growth of trading blocs on the global economy

    Also trading blocs increases geographical mobility of workers, for example, an accountant from London can go to Germany freely if they wanted to because of a free movement of labour agreement. However, the problem with free movement of labour, is many people who live in a poorer and less affluent

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work