The Growth in Regional Trade Block - Report Example

The growth in regional trade block with the objective of increasing trade relations between the member countries is one of the major developments which the world economies have witnessed. It is also seen that all countries are part of some or other sort of trading block and the trading blocks accounts for more third of the total international trade that takes place between nations. This has thereby given rise to more and more trading blocs which look towards strengthening the carrying out business among the different blocs. One of the prime purposes which have led towards the development of trading bloc is to reduce the trade barriers and facilitate the trade between member countries which has also been looked by other countries as a measure of protectionism to protect the domestic industry. Developing trading blocs thereby helps to remove the intra-bloc trade of goods and also helps to ensure non-tariff barriers between the member countries and provides a process through which liberlization of investment and other policies takes place. This paper evaluates the European Union trading bloc which facilites the trade between European countries and the manner in which it has simulated more and more activities within the trading bloc and its partners. This will thereby help to understand the overall purpose of developing a trading bloc and will provide different reasons based on which trading blocs have been created. The European Union is a political and economic union where 27 countries come together and look to carry on international trade between them by reducing the trade barriers which is present. The European Union has been developed after World War II and has been developed after different treaties to ensure prosperity within the region were identified and adopted. The purpose of developing the European Union was that the different countries that were part of the European Union shared the same sovereignty and looked towards promoting interdependence in the field of nuclear, coal, steel and other production. The further development of the European Union resulted in the widening of activities and started to function as a single unit in which goods, people, and capital move freely, a common trade policy, a common agricultural policy, many aspects of social and environmental policy, and a common currency has been adopted (Baldwin, Forslid and Haaland, 2006). This has thereby reduced the number of rules and regulations which were present between the different countries and increased their interdependence on one another. The European Union functions together as common institutions where collective interest of all the members is given relevance and strategies are developed to promote trade between the economies. The European Union members have thereby looked at harmonizing law and look to take a joint policy statement through which overall effectiveness can be gained which will thereby ensure that trade is developed and will help to increase the number of business that has been provided. The European Union has looked towards integration of trade, agriculture, education and environment so that better developments and far fetching influence can be developed for the different economies. To ensure that trade is facilitated the European Union has ensured that all the decisions are taken by all the 27 members jointly so that it doesn’t have an influence on the style of work (Gordon, Rimmer and Arrowsmith. 2008). The overall process of European Union thereby looks to ensure intergovernmental decision making where decisions taken helps to improve the overall effectiveness and ensures better decision making and trade relations. The European Union trading bloc didn’t look to work on the strategy of a closed regionalism which was prevalent in the other trading blocs in the 1960’s and 70’s. The model looked towards ensuring that the trading bloc was outward looking and looked to boosting international business instead of controlling it through import-substitution ways. In the early years European Union also focused on import-substitution and looked to work between there own members but slowly with the passage of time it was rectified and a more open attitude and outlook was adopted. This helped to ensure that overall process looked towards increasing the trade not only between the member nations but also looked to increase the trade with the outside world and other economies (Levy, 2005). The European Union has ensured that the development of trading bloc has helped to reduce the tariffs and quotas through which the entire process of entering into trade relation between the different member countries has improved. The different members of the European Union has been able to gain from it as it has helped to reduce the rules and regulations and has thereby helped to increase the level of business transactions which is taking place. In addition to it the European Union also looked to remove different barriers ensuring free flow of goods and services, investment and ideas which has helped to improve the volume of trade that takes place within the member countries (Hanson, 2006). This has thereby brought a change in the style of work and has ensured that the overall business process gains effectiveness. The development of trading bloc like European Union has helped to ensure that both the developed and developing and industrial countries come together and develop an environment through which business process had developed. This has ensured that all members are treated equally and has thereby brought the required transformation through which the business has developed. The overall process has thereby multiplied the effectiveness of the trading bloc and has helped the members of the European Union to improve the trade which takes place between them (Hoekman and Braga, 2007). This will thereby bring the required transformation through which better business relations are developed and have helped to increase the amount of trade that takes place within the members of European Union. The strength and development of the business of European Union is on the premise that the members adopt a common policy, undertake joint actions and pursue coordinated strategies through which better decisions are arrived at. This has helped all the members to come together and function as a common unit. The overall development has been such that it has helped in the development of foreign policy and has thereby strengthened the business activities (Bilal, 2008). The simplification of the quotas and tariffs has further ensured that the member countries can carry out the business activities within themselves without any obstacle. This has thereby facilitated more trade between the economies and has helped to increase the volume of trade that takes place between the member countries of the European Union. The European Union also has its external trade policy which implies that no members who are part of the European Union can negotiate their own international agreement and is instead bound to follow the guidelines and external trade policy which the European Union has entered on behalf of all the members. The policies developed by European Union are well developed and integrated which has ensured that no activities which can have an effect on the other members are taken. This has helped to provide a common market where movement of goods takes place within the members of European Union. This has been further strengthened by the fact that it prevents its member countries in importing products at low price and then exporting the same to the member countries at a higher price. This would lead towards exploitation of the free trade agreement which exist between the members. The European Union has ensured that such acts are not indulged in and has thereby ensured that the policies are developed which limits such actions (Ben-David, 2003). To improve the importance of common trade the European Union has also looked to include trade in services, the defense of intellectual property rights, and foreign direct investment so that overall effectiveness is gained in the policies which has been developed and has thereby helped to ensure that the volume of business between the member countries increase. To strengthen the business between the member countries the European Union has developed custom tariffs, export policies and trade protection which have helped to increase the volume of trade and has thereby ensured that the overall business prospective ensures better business. This has thereby ensured that the overall business perspective looks to improve the overall trade between the trade members and has thereby helped to ensure that the volume of trade has increased (Ben-David, 2003). The European Union looks to negotiate between other countries and trading blocs on the union as a whole so that the policies which are determined are applicable for all members. Despite it the European Union is also viewed by many as a process where the economies have looked towards a strategy of protectionism so that the domestic industry can be protected. This has further led towards determining the fact that the members at time also have suspicion regarding the policies which have been adopted and the increase chances which could result in different economies entering onto trade relations with other countries and can impact the overall decisions which are taken within the European Union. The situation also complicates as the smaller economies often fear that the bigger or industrial economies might influence the European Union to take decisions which will benefit them and might create a situation where the benefits which the union should provide is lost (Bagwell and Staiger, 2008). Despite, the different risk which member countries present in the European Union fear the trading bloc has been able to grow their trade and has been primarily due to free trade agreement being possible between the trading nations which has provided every economy to grow. The development of the European Union as a trading bloc has also provided an opportunity through which the different economies that are part of the European Union have access to different economies. This has provided an opportunity which has ensured that the economies can gain both from the trade that takes place between the member countries and other countries. This will thereby ensure that the overall effectiveness of the European Union multiplies and will thereby ensure that the economy is able to bring the required changes and will help to improve the process and increase the volume of trade that takes place within the economy (Krueger, 2007). The development of the trading bloc as European Union has also ensured that the entire block functions as a competitive block as uniting the different forces have ensured that the bargaining power increases. This will thereby help to ensure that the process gains effectiveness and will help to multiply the volume of trade as using the measure will ensure that the European Union is able to bring maximum effectiveness. Further, the development of the different reforms and relaxation of trade and quotas will help to ensure that the different member countries are able to gain and bring effectiveness through which they will be able to increase trade and ensure that the business between the different economies are carried out without any problems. . The European Union members have thereby looked at harmonizing law and look to take a joint policy statement through which overall effectiveness can be gained which will thereby ensure that trade is developed and will help to increase the number of business that has been provided (Fernandez and Jonathan, 2008). The different members of the European Union has been able to gain from it as it has helped to reduce the rules and regulations and has thereby helped to increase the level of business transactions which is taking place. In addition to it the European Union also looked to remove different barriers ensuring free flow of goods and services, investment and ideas which has helped to improve the volume of trade that takes place within the member countries. Thus, the development of a trading bloc like European Union has helped to increase the volume of trade which takes place between the member countries and has thereby brought a change in international relations. The development of trading bloc doesn’t look towards protectionism as seen in the European Union but instead facilitates in the development of free trade agreement through which better international trade can be carried out among the member countries. This has thereby ensured that the different benefits which trading bloc provides has been accrued and has helped to bring the required change and has improved the volume of trade which takes place between the member countries References Bagwell, K. and Staiger, R. (2008). 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