Question

Do you think countries with distinctively different cultural, historical, and economic histories can effectively enter into a trade agreement? Select one regional trading bloc and discuss the economic motivations for that group of countries to form an agreement.

Answer 1

Answer: Increasing focus on Regional Integration and the formation of various trade blocks which promote free trade agreements,helps in economic liberalisation, promotion and generation of new jobs has got its unique importance in world affairs.

Today Globalisation is a reality, every country's progress has completely interconnected with other country.At very initial level Countries want to enhance there domestic businesses by enhancing trade with other countries in such a ways to that it become win win situation for them.Hence concept of trade blocks has got importance.Countries with different cultural,historical and economic histories can be today seen coming together and entering into trade agreements here can be mentioned name of few with such characteristics are

APEC (ASIA PACIFIC ECONOMIC COOPERATION): countries few which are developed and some which are developing faced colonial rule,once followed autarky came together to enhance cooperation in field of economic and development. NAFTA(NORTH AMERICA FREE TRADE AGREEMENT): US,MEXICO,CANADA came together in 1994 to form such block which tried to give preference to each other in trade and related matter over other nation in one hand US Canada are highly developed countries with different cultures on the other hand Mexico a developing countries with contrasting culture and political System came together to form one of the most successful trade blocks

RCEP(REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP) It is a recent framework which contains in it self highly divers countries in terms of political system like socialist China, mixed system in ASEAN ,and most liberalised and capitalist system in JAPAN,SOUTH KOREA,AUSTRALIA.

These are all such examples which got motivation from the merits of Such trade blocks like.

1.It increase trade among countries hence give boost to businesses improve workforce and working culture.

2.It increase easy flow of goods and services that too at competitive prices hence benefits consumers.

3.It increases market efficiency and FDI flow in such contries hence boost EASE OF DOING BUSINESS.

4.increase cross country movement hence bring new innovations and technology transfer among countries

There are many more but they the primary motives for forming trade blocks.