Trading Blocs and Agreements

Trading Blocs and Agreements

1. The WTO (world trade organisation) main aims:

   • 1. The liberalisation of Trade
   • 2. Non- discrimination: the Most favoured nation policy which states that any protection concessions granded to one country should be granted to all members.
   • 3. No unfair encouragement for exports
   • The WTO main achievements: 1. Reduced domestic protection and export subsidies 2. Cut tariffs by 1/3 and 3. Phased out Quotas
   • 164 members

2. The Doha Round

   • Latest round of WTO discussions
   • Aimed ti help least- developing countries increase their ability to trade and some additional preferential market access agreements
     • Making importing and exporting more efficient and less costly by increasing the transparancy and customs
   • Decisions were made regarding preferential treatment for least developing countries in the area of services and the criteria used to determine where exports from LDCS may benefit from trade preferences
   • Main issues still at Stake: 1. ensuring the liberalisation in the global economy respects the need for susainable economic growth in developing countries. 2. improve the access for developing countries to global markets for their exports

3. APEC: Asia Pacific Economic Co-operation Forum.

   • Formed in response to the development of trading blocs such as the EU
   • Agreed to target free trade for its members by 2020 extending to all trading nations
   • Huge benefit to Australia as 71% of merchandise exports go to APEC nations

4. What is a trading bloc?

   • A trading bloc is a group of countries that allow imports from member countries freely or cheaply while imposing barriers against imports from outside countries
   • Can be a free trade area: members remove barriers between themselves but keep individual national barriers to other nations E.G. NAFTA
   • Can be a customs union: members remove barriers between themselves and adopt a common set of external barriers to other nations e.g. MERCOSUR
   • Can be a common Market: All members allow full freedom of factor flows among themselves in addition to a customs union
   • Can be the Economic Union: Where are members unify all their economic policies including monetary and fiscal. It operates as if it were a single country.

5. The EU: Worlds Largest Trading Bloc

   • Formed in 1993
   • 23 member countries
   • Main concern: Common Agriculture policy which subsidises local farmers. This has leAd to a fall in world agriculture prices
     • The EU has suffered a loss of economic welfare due to subsidies and prohibition of cheaper imports
     • This has had a major impact on Australia's rural exports

6. NAFTA: North America Free Trade Agreement

   • Signed in 1992 by Canada, America and Mexico
   • Eliminates tariffs amount the nations and substantially reduces non tariff barriers
   • Barriers on capital also removed
   • Main benefits have been for Mexico but USA also owning more Mexican businesses
   • Donald Trump wants to demoslish NAFTA

7. CERTA: Bilateral agreement between Australia and New Zeland

   • Eliminates tariffs and other quantitive restrictions on trade between AUS and NZ

8. China - Australia FTA (ChAFTA)

   • 2014
   • Removal of tariffs on all dairy produce
   • Reduced tariffs on beef, live animal exports and sheepmeat
   • Removal of tariffs on all resources and energy products
   • Will promote further growth of Chinese investment in Australia.
   • Promote increased trade and investment between both nations: reduce both barriers to labour mobility and improving temporary entry acess