Question.
What benefits do nations get by forming trading blocs?
(Class 12 geography, Fundamentals of Human Geography, Chapter 9. International Trade )
Answer.
About the trading blocs:
A trading bloc is also called a regional trading bloc. trading blocs are formed to encourage trade between countries and they have formed the basis of geographical proximity, socioeconomic equality, and complementarity in trade.
There are about 120 major trading blocs in the world that account for 53% of global trade. Some of the major trading blocs are:
ASEAN (Association of Southeast Asian Nations)
CIS (Commonwealth of Independent States)
European Union (European Union)
NAFTA (North American Free Trade Association)
LAIA (Latin American Unification Association)]
OPEC (Organization of Petroleum Exporting Countries)]
SAFTA (South Asian Free Trade Agreement)
BRICS (Brazil, Russia, India, China, and South Africa).
Following are some of the benefits of creating a trading bloc:
Trade blocs lead to the integration of the economy and people between the member countries of the trading blocs.
Trading blocs remove trade barriers within member countries and encourage the free flow of goods and services that benefit industries as well as people to obtain cheap and best-quality products.
Trading blocs also form collective voices in the international forum and collaborate with other areas of things like human rights, culture, and defense.
Trade blocs help member countries in their economic development, cultural development, peace, and regional security.
It also increases competition between member countries and their firms resulting in overall efficiency in operations and production.
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