TRADING BLOCS & WTO PRESENTATION

TRADING BLOCS

& The WTO

Presentation

By Temi Onabajo and Christé Kwende

Index

Trading Blocs

The Team

World Trade Organisation

Thanks

TRADING BLOCS

What are Trading Blocs

From the specification

A regional trading bloc is a group of countries within a geographical region that makes trading between themselves easier. They sign an agreement to reduce or eliminate tariffs, quotas and other protectionist barriers among themselves to encourage free trade There are 4 main types of trading blocs - Free Trade Areas - Custom Unions - Common Markes - Monetary Unions

I will now delve deeper into each one

Free Trade Areas

What are they ?

The term free trade areas describe a group of countries that mutually agree to remove trade barriers between them - Examples include; USMCA, AFTA, NAFTA Removing these trade barriers makes trading between member contries significantly easier which encourages the increase in trade between them The removal of these trade barriers does not prevent each country from imposing its own tariffs and other trading barriers on other non-member nations

Custom Unions

In a Customs Union, all trade barriers are removed between member nations and all member nations must have a common external tariff on imports from non-member nations

CONTEXT

When the UK left the European Union, it was no longer subject to free trade and all countries within the EU were ordered to impose a common external tariff of 10% on cars However, recently the UK now has its right to impose its own tariffs and trade barriers

Common Markets and Moneatry Unions

What are they?

In Common Markets and Monetary Unions, all trade barriers are removed between member nations. All member nations must have a common external tariff on imports from non-member nations

The difference between Common Markets and Customs Union is in a Common Market, factors of production are free to move without special permission leading to trade becoming significantly easier

The difference between a Monetary Union and Customs Union is that in Monetary Unions, all member nations must use a common currency to decrease the chance of unfair trade

Some examples of this are- European Single Market (European Economic Area – Switzerland) - Central American Common Market (CACM)

Trading Blocs

Benefits

Strengthened Political Ties

Tarrif Reduction

Economic Growth

• As trade between contries becomes cheaper, it will encourage contries to partake in more trade, stimulating economic growth

• Again refering to the cost the lies with trade to be reduced which can encourage contries also to partake in more trade

• RTAs can promote political cooperation and peace among member countries.

Trading Blocs

Costs

Trade Diversion

Sovereignty Decrease

Economic Disparities

• This basically refers to to when a contry will only decide to trade with other contries that are members of the specific trading bloc which can lead to trade diversion

• Trading could encourage a loss in authority which could make trade unfair

• Economic disparity is just a different way of saying economic inequality, which is the unequal distribution of income, wealth, and opportunities across different groups in society.

+ info

+ info

+ info

WORLD TRADE ORGANISATION

What is the WTO?

The World Trade Organisation (WTO) is an international organisation which regulates and facilitates global trade They are often viewed as the standing authority over contries who determines if trade is fair or not. They were formed in 1995 and holds operations in Geneva, Switzerland

Key Functions

Some of its key functions include - Organise Rounds of Talks - Settle Trade Disputes between members - Monitoring Trade Policies - Trade Liberalisation (this is the removal/reduction of trade barriers)

The WTO promotes trade liberalisation by reducing tariffs and trade barriers through negotiations, ensuring fair and open global trade. (4.1.5 c)

WTO and Trading Bloc Conflicts

Trade Diversion

Biased Treatment

Trade Discrim.

• If Regional Trade Agreements lead to trade diversion, they can be contrary to the WTO’s goal of reducing trade barriers globally

• Regional Trade Agreements may discriminate against non-members, potentially violating the WTO’s most favoured nation principle

• WTO generally favour non-discrimination, while Regional Trade Agreements provide preferential treatment to member countries

THE Team

Christè Kwende

Temi Onabajo

• Helped out significantly with the research
• Gave good Ideas
• Reseached Key Examples

• Planned out the Presentation
• Organised everything together
• Added extra relevant research

Thanks!

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