Nov 06 2008

Trading blocs and economic integration - IB student case studies

20 Responses to “Trading blocs and economic integration - IB student case studies”

1. # Eithan and Wilhelmon 06 Nov 2008 at 10:42 pm

   The states which are part of the USAN include:

   • Bolivia
   • Peru
   • Ecuador
   • Brazil
   • Uruguay
   • Argentina
   • Guyana
   • Suriname
   • Chile
   • Paraguay
   • Venezuela
   • Columbia

   USAN is an intergovernmental union integrating two existing customs unions: Mercosur and the Andean Community, as part of a continuing process of South American integration. It is modeled on the European Union. Several presidents of the USAN want to work towards making USAN a common market. However, for now, it remains a customs union. Possibly by 2019, USAN will integrate into a common market.

   Brazil has benefited greatly from the USAN customs union. From 2004 to 2007, GDP per capita increased from 3,000 dollars to 7,000 dollars. Moreover, from 2001 to 2007, GDP increased from 509 billion dollars to 1,463 billion dollars. This increase in GDP may be attributed to the increase in trade Brazil has undergone as a result of its membership in USAN. Brazil’s total trade (imports plus exports) with the other members has increased substantially in the last couple of years, rising from US$15.3bn in 2004 to US$18.8bn in 2005, then US$22.9bn in 2006. Total trade in the first four months of 2007 was more than US$8bn. Brazil has recently helped form the South American Bank, that will finance local development programs in member states of USAN to promote scientific and technological growth. This will especially help Brazil to utilize its vast natural resources and low-cost labor in order to grow and develop.

2. # Joelon 06 Nov 2008 at 10:50 pm

   PARTA (otherwise known as Pacific Islands Forum)

   Member states include:
   Australia
   Cook Islands
   Federated States of Micronesia
   Fiji
   Kiribati
   Marshall Islands
   Nauru
   New Zealand
   Niue
   Palau
   Papua New Guinea
   Samoa
   Solomon Islands
   Tonga
   Tuvalu
   Vanuatu
   New Caledonia
   French Polynesia

   These nations are signatories to a free trade area agreement called PICTA (Pacific Island Countries Trade Agreement). The aim of this agreement is to eliminate all tariffs between signatories by 2021. However, within the free trade area there is an additional FIC customs union between countries which have subscribed to this agreement to immediately eliminate tariffs between them. In addition, the PICTA agreement only stipulates an elimination of tariffs on goods, not on services.

   To evaluate a specific country within the PARTA agreement, New Zealand has benefitted significantly from this economic union, but stands to lose out until all trade barriers are removed under the agreement. According to New Zealand government figures, New Zealand exports to PARTA states have totalled $1 billion. The steady removal of tariffs has evidently opened up new markets to New Zealand industries, providing more domestic employment and economic growth. New Zealand seems to be benefitting from this agreement.

   However, there is still the issue of the FIC customs union. Countries within this union have awarded each other MFN (Most Favoured Nation) status, giving preference to each other as trading partners. This results in New Zealand producers suffering from tariff disadvantages, and increased competition when trading with countries within the customs union (of which it is not a member). Producers in countries within the union can export goods and services to one another at a much lower cost than New Zealand producers can, retaining an advantage. This will be increasingly hard-hitting for New Zealand producers until PARTA fully eliminates tariffs.

3. # Magdalena and Robinon 10 Nov 2008 at 5:22 pm

   Greater Arab Free Trade Area (GAFTA)

   The GAFTA consists of 17 Arab countries:

   • Jordan
   • United Arab Emirates
   • Bahrain
   • Saudi Arabia
   • Oman
   • Qatar
   • Morocco
   • Syria
   • Lebanon
   • Iraq
   • Egypt
   • Palestine
   • Kuwait
   • Tunis
   • Libya
   • Sudan
   • Yemen

   The GAFTA is a free trade area which is run by the Arab League nations, who were trying to create an Arab trading bloc. It was launched in 1997 at the Arab League Summit of Amman. The purpose was to gradually reduce all tariffs and non tariff barriers over a 10 year period. In 2005, the agreement reached full trade liberalization of goods through the full removal of customs duties and charges of all members of the GAFTA, except Sudan and Yemen. Since Yemen and Sudan are the less developed Arab countries, they are allowed to have tariffs, but they have to decrease its tariffs by 16 % each year. So by 2010 all tariffs will be removed in the GAFTA.
   Saudi Arabia was able to benefit from the GAFTA. In 2005, the exports from Saudi Arabia to GAFTA were 10170.2 million US dollars. This is an increase of 36.6 % from the previous year. Their imports were worth 2919.7 million US dollars from the nations in GAFTA, which was a 10.5 % increase from 2004. Their net exports were worth 7250.5 million US dollars just from GAFTA. This has contributed to the increase in Saudi Arabia’s GDP.

4. # Maddi Diamondon 11 Nov 2008 at 12:04 am

   CARICOM is a Caribbean trade block whose members are

   •Antigua and Barbuda,
   •the Bahamas
   •Barbados
   •Belize
   •Dominica
   •Grenda
   •Guyana
   •Haiti
   •Jamaica
   •Montserrat
   •Saint Kitts and Nevis
   •Saint Lucia.

   CARICOM used to be merely a free trade association, but was updated in 1974to a combined customs union and common market. CARICOM organizes projects between it’s members such as the Caibbean Renewable Energy Development Program (CREDP) and assigns heads of each member a role in the community such as justice and governance, or tourism, for example. The community of members in CARICOM share a common trade policy, free movement of labor and goods, harmonization of laws, a common external tariff and free movement of capital.

   Jamaica is one of the larger country members in CARICOM and this nation’s primary health threat is currently HIV/AIDS. Due to its place in CARICOM, Jamaica is aided by programs educating its civilians about the heath threat of AIDS, and preventative measures. CARICOM has also provided Jamaica with health care services and tools specifically aimed towards fighting HIV/AIDS. CARICOM has also created programs intended to enhance technology transfer to overcome the loss of trade preferences and trade liberalization to Jamaica. Other programs created to prevent these losses are the transfer of new marketing development managers, and specialists who are in the process of designing new irrigation channels for Jamaican land owners to increase soil fertility and output.
   To further increase output, CARICOM has installed new educational programs for farmers, as Jamaica exports mainly agricultural goods such as coffee, sugar, bananas, rum and yams. There are now new educational degrees available for Jamaicans interested in becoming more knowledgeable about their occupations, such as the recently created Certificate in Tropical Agriculture, and the Certificate of Agri-Business Management. Other more specific agricultural control programs have risen in the country due to interactions with CARICOM, such as a plan for the biological control of the Pink Mealy bug, which plagues many Jamaican crops.
   Overall, CARICOM are helping Jamaicans improve their human capital, as the nation does not have access to much industrial equipment. After Jamaica’s entrance to the CARICOM common market, exports grew impressively to US$85 million, giving Jamaica a trade surplus of US$25 million, drastically helping the economy. Some believe that CARICOM has hindered the development of the Jamaican economy, as CARICOM did impose new environmental standards regulations on Jamaican farmers, and this caused a decrease on Jamaican output. However, CARICOM has, in my opinion, been doing a good job to combat these losses, and not only did they impose environmental standards, but also food safety systems, which has resulted in a decrease in food related illnesses and deaths in the country, and healthy human capital should result in greater output and more efficient labor.
   Further more, CARICOM has, if anything, forced Jamaica to become more efficient due to its inability to place tariffs on its neighboring CARICOM competitors, and has been awarded US$22.2 million to divide into sectors of its economy in order to grow. These sectors include information systems, health support, and fishery, crop and livestock development programs.

5. # Nicon 12 Nov 2008 at 12:44 am

   The North American Free Trade Agreement (NAFTA) is a trade agreement between:

   Canada
   Mexico
   United States of America.

   It is the largest Free Trade Area in the world accounting for over 21.7 million square kilometres. The implementation of NAFTA began on the 1st of January, 1994. The aim of the agreement is to remove barriers to trade among each of the participating nations. It was agreed that all goods and services could be traded freely.
   Under the NAFTA, all non-tariff barriers to agricultural trade between the United States and Mexico were eliminated. In addition, many of the tariffs were removed immediately, and the others were being eliminated over a period of 15 years.
   The agreement between the United States and Canada eliminated all agricultural tariffs by January 1998, with the exception of a few.
   Mexico and Canada eliminated their barriers to trade on all agricultural products except for dairy, poultry, eggs, and sugar.

   The United States has seen a great impact on their economy because of the NAFTA. From 1993 to 2007 trade among NAFTA nations tripled to $930 billion, and business investment has risen by 117% since then. US employment also rose from 110.8 to 137.6 million from 1993 to 2007. A 24% increase which has seen the level of unemployment fall from 7.1% at the end of 1992 to 5.1% at the end of 2007.

   Manufacturing output rose in this period as well and manufacturing exports reached an all time high of $982 billion by 2007. U.S. business sector real hourly compensation rose by 1.3 percent each year between 1993 and 2007, for a total of 19.3 percent over the full period. During 1979-1993, the annual rate of real hourly compensation rose by 0.8 percent each year, or 11 percent over the full 14-year period.

   Finally, the NAFTA has created new benefits for U.S agriculture. Canada and Mexico account for 37% of agricultural growth in the US and US exports to Canada and Mexico have increased from 22% to 30% since 1993. Mexico is the top export destination for beef, rice, soybean meal, corn sweeteners, apples and dry edible bean exports. It is the second largest export market for U.S. corn, soybeans and oils, and third largest for pork, poultry, eggs, and cotton.

6. # Liviaon 12 Nov 2008 at 3:40 am

   Livia and Elisabeth:

   European Economic Area:

   Austria
   Belgium
   Bulgaria
   Cyprus
   Czech Republic
   Denmark
   Estonia
   Norway
   Poland
   Portugal
   Romania
   Finland
   France
   Germany
   Greece
   Hungary
   Iceland
   Italy
   Slovakia
   Slovenia
   Sweeden
   Ireland
   Leichtenstein
   Latvia
   Lithuania
   Luxembourg
   Malta
   Netherlands
   UK

   The European Economic Area Agreement is also known as the “Internal Market” - a free trade area, which goods, people, services and capital can move around freely. It was introduced the 1st January 1994, bringing together 27 EU countries and 3 EFTA countries. This agreement does not cover the EU’s customs or monetary union.

   This agreement could bring great benefits to all the countries involved. Goods, services, people and capital would be able to move around freely therefore trade barriers were removed, decreasing prices and allowing “bilateral trade” to occur. France, for example, benefitted from this agreement as it now has many immigrants and goods from other countries that have helped its economy to grow, by allowing french labour to free up in places in which they are best suited for.

7. # Alex Telford and Gorkaon 12 Nov 2008 at 4:50 am

   Unasur

   12 South American countries will be involved in the Unasur trading bloc when it comes into effect in 2009, they are as follows;

   1. Argentina
   2. Bolivia
   3. Brazil
   4. Chile
   5. Columbia
   6. Ecuador
   7. Guyana
   8. Paraguay
   9. Peru
   10. Suriname
   11. Uruguay
   12. Venezuela

   These 12 countries represent all the countries in South America except for French Guyana. Unasur is an intergovernmental union formed through the merger of two established customs unions (Mercosur and the Andean Community). Unasur is based on the EU; the leaders of Unasur plan to have a common currency, parliament and passport system1.

   The countries involved have a GDP of 2,349 billion dollars (nominal, 2007 IMF est.). The total population of the countries involved is 384 million, and the countries cover an area of 17.7 million square kilometers. It is the world’s foremost agricultural producer2. One of the main goals of Unasur is the elimination of tariffs by 2019 between member states.

   Although Unasur is not yet established it is possible that it might have a similar effect on Brazil as the creation of Mercosur did in 1991. Mercosur helped brazil curb its trade imbalance by placing tariffs on non-mercosur goods and helped to make Mercosur members relatively more competitive through the following means

   “These measures are: (a) the elimination of export subsidies; (b) the restoration of the “statistical rate” of 3 per cent on non-MERCOSUR imports; and (c) an increase in tariffs on capital goods from 0 to 10 per cent and on telecommunications equipment from 2 to 10 per cent. In April 1995, Brazil adopted a number of measures to stem the surging tide of imports (cumulative trade deficit between November 1994 and April 1995 of US$4.4 billion) as follows: (a) a 32 to 70 per cent increase in tariffs on 109 products (mainly automobiles and durable goods); (b) tariff reduction for a number of products to alleviate inflationary pressures; (c) broadening of the list of exceptions from 300 to 450 products for one year; and (d) the recent establishment of an import quota on cars to 5 per cent of national production, or 85,000 units per year.”

   However these measures were intended to be temporary.

   Trade within the countries increased drastically, from “ US$4.1 billion to US$10.7 billion” from 1990 to 1994. “In the areas of food, textiles, plastics and construction materials, partnerships have been set up between Brazilian and Argentine producers.” as well as other partnerships which act to encourage specialization among the member states. Tourism and foreign investment into Brazil has also increased drastically. Additionally, in “Brazil, [...] the introduction of the “Plan Real” in July 1994 reduced inflation sharply from a monthly level of over 40 per cent up to June to less than 6 per cent in July and under 4 per cent from August through December.”3. Brazil received perhaps the greatest benefit from Mercosur relative to the other participants.

   1. http://tinyurl.com/6lw6a8
   2. CIA World Factbook 2005, IMF WEO Database, IMF nominal figures for 2006
   3. http://www-old.itcilo.org/actrav/actrav-english/telearn/global/ilo/blokit/mercor.htm

8. # Nick and Dierdreon 12 Nov 2008 at 5:04 am

   East African Community (EAC) (Customs union)

   Members include:
   Burundi
   Kenya
   Uganda
   Rwanda
   Tanzania

   The East African Community (EAC) is an intergovernment Customs union. The Treaty for Establishment of the East African Community was signed on 30th November 1999 and entered into force on 7th July 2000 following its ratification by the Original 3 Partner States – Kenya, Uganda and Tanzania. The Republic of Rwanda and the Republic of Burundi acceded to the EAC Treaty on 18th June 2007 and became full Members of the Community with effect from 1st July 2007.

   The EAC aims at widening and deepening co-operation among the Partner States in, among others, political, economic and social fields for their mutual benefit. To this extent the EAC countries established a Customs Union in 2005 and are working towards the establishment of a Common Market by 2010, subsequently a Monetary Union by 2012 and ultimately a Political Federation of the East African States.

   CA Trade Hub has helped to develop a common interface between Kenyan & Ugandan customs systems to share and store information to meet international standards as per World Customs Organization rules in the Revised Kyoto Convention

9. # Christinaon 12 Nov 2008 at 5:48 am

   PARTA

   Members:
   Fiji, Papua New Guinea, Solomon Islands (FIC - Forum Island Countries), Tonga, Tuvalu, Western Samoa, Cook Islands, Kiribati, Niue, Australia, New Zealand

   Type: Free Trade Area

   Goals:
   This trade agreement was more of an attempt for the bigger countries to try to export their goods to all the surrounding small-island countries. The agreement states that the FIC have to eliminate tariff barriers. The agreement should overall try to also make it fair for the small islands even though it clearly mostly helps the producers of the big exporting countries like New Zealand and Australia.

   Impact on FIC:
   Bad because the elimination of tariffs will lead to imports of vast amounts of goods from the larger countries in the agreement such as New Zealand and Australia making it very hard for domestic producers to compete. At the same time, consumers will get better prices for these goods, increasing their surplus. Problem would be if the country does not have enough goods produced that the other countries don’t produce as they won’t be able to export anything to gain revenue.

10. # Sebastian Son 12 Nov 2008 at 6:46 am

    Brunei Darussalam

    Cambodia

    Indonesia

    Lao PDR

    Malaysia

    Myanmar

    Philippines

    Singapore

    Thailand

    Vietnam

    The ASEAN is a free trade area which was established in 1967 by Thailand, Indonesia, Philippine and Singapore. Their goal was to accelerate their economic growth and to develop the infrastructure so that the nations had a foundation for their economic growth. This provided a peaceful environment in the rather unstable area. Also they established between them a free trade area, a free flow of investment and they have struck trade agreements with other countries such as China and the EU.

    As Singapore has in the alliance form the start it has felt its full effects which have lead it to an economic boom. In the last twenty years their level of education increased and with that the literacy rate also increased this is due to the growth in GDP Singapore is experiencing in 2000 they had a 10% growth rate which is remarkable for an city state that just became independent last century. Also the GDP per Capita has increased from 25219US$ to 26564US$. Even though these numbers seem small the relative wealth is great enough for most of the population to be middle class. So the ASEAN has clearly contributed a great deal to the growth of Singapore.

11. # Horiaon 12 Nov 2008 at 4:22 pm

    The Southern African Customs Union (SACU) is a customs union among five countries of Southern Africa. Established in 1910 SACU is the oldest customs union in the world.

    SACU currently has five members:

    * South Africa
    * Botswana
    * Lesotho
    * Swaziland
    * Namibia

    Namibia Trade Policy Review:

    Trade liberalization and investment promotion constitute key elements of Namibia’s trade policy framework and her development strategy. The following are the main objectives:
    - Promotion and further liberalization of trade;
    - Expansion of exports and diversification, in terms of both products and markets;
    - Provision of tax-based incentives for manufacturing enterprises and exporters;
    - Support to small and medium-size enterprises (SMEs); and
    - Creation of an environment conducive to investment and growth.

    - The corporate tax rate have been reduced to 35%;
    - No income tax is payable on dividends accruing to resident shareholders (with the exception of some building societies’ dividends of which only one third is tax free);
    - Non-resident shareholder tax (withholding tax) has been reduced to 10%;
    - Plant machinery and equipment can be written off over a period of only three years; and
    - Buildings can be written off over 20 years, with 20% depreciation allowed in the first year.

12. # Miguel and Rosson 12 Nov 2008 at 5:58 pm

    - The countries that are in the East African community are Kenya, Uganda, Burundi, Tanzania and Rwanda
    - This East African community is a customs union in East Africa and it was signed in 2000. They plan to become a common market by 2009.
    - This customs union was actually founded on 1967 but then collapsed in 1977 , it was officially brought back in 2000.
    - Was a free trade first
    - Became a customs union in march 2005
    - In 2008, the EAC, after negotiations with the southern Africa development community(SADC), and the common market for Eastern and Southern Africa(COMESA) agreed to an expanded free trade are including the member states of all three.
    - Hope for single tourist visa/ east African shilling: plans for common union
    - Under the terms of the treaty, Kenya, the regions largest exporter, will continue to pay duties on its goods entering the other four countries until 2010, based on a declining scale. A common system of tariffs will apply to goods imported from third party countries.
    - Has increased GDP of the countries, but unfair to Tanzania as it has more land than all the others combined.
    - Kenya’s involvement in the EAC has helped with meeting the Kyoto protocol.

13. # Lisa Gon 12 Nov 2008 at 6:33 pm

    European Economic Area (EEA)
    Member states: All member of the EU (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy Latvia, Lithuania, Luxembourg, Malta, Netherland, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) and
    The members of the EFTA (Liechtenstein, Iceland, and Norway
    Switzerland (not part of the EFTA)

    What type of trading bloc and its agreements:
    This is an example of common market. There are Four Freedoms, which summarize the agreements between the countries:
    • The free movement of consumer goods;
    • The free movement of labor and citizens, and freedom of establishment;
    • The free movement of services;
    • The free movement of capital.

    Impact the trading bloc had on one member (Bulgaria):
    The impact which The EEA trade agreement had on the Bulgaria, it was a former part of the Soviet union, and now it has to option to trade with wealthy countries in the West.
    It now has: increase in trade, increase competition (increase efficiency, efficient firms will gain from the new opportunity for trade , more unemployment in the SR, but a gain in GDP in the LR).

    The EEA increases competition, specialization and allow and increase in economies of sale. It also factors of productions and resources to move in between countries, so they can be allocated to their best use. This improves the efficiency and drives down cost, as there is more competition.

    Exports - commodities:
    clothing, footwear, iron and steel, machinery and equipment, fuels
    Exports - partners:
    Turkey 11.5%, Germany 10.3%, Italy 10.2%, Greece 9.1%, Belgium 6.2%, Romania 4.9% (2007)
    Imports - commodities:
    machinery and equipment; metals and ores; chemicals and plastics; fuels, minerals, and raw materials
    Imports - partners:
    Russia 12.3%, Germany 12.3%, Italy 8.7%, Ukraine 7.2%, Turkey 6.9%, Greece 6.2%, Romania 4.5%, Austria 4.3% (2007)

14. # Matteoon 12 Nov 2008 at 6:41 pm

    ASEAN: Association of southeast Asian nations

    Members of the ASEAN:

    Brunei

    Indonesia

    Malaysia

    Philippines

    Singapore

    Thailand

    Vietnam

    Aims: The ASEAN refers to Association of southeast Asian Nations. It is a free trade area who’s goal is to create a stable, prosperous and highly competitive region in which there is a free flow of goods, services, investment and a more open flow of capital. ASEAN also wants this economic development to equitable in order to try and reduce poverty and socio-economic disparities by the year 2020.

    The free trade area between ASEAN nations is known as the AFTA. It’s purpose its to promote the region’s competitive advantage if producing as a single production unit. The AFTA is completely tariff free for the member countries in order to try and promote greater economic efficency, productivity and competitiveness.

    Interesting Statistics:

    We data below shows the improvement ASEAN brought to these nation toward a freer economy.

    • 99% of the products of the first members of ASEAN ( Brunei Darussalam, Indonesia, Malaysia, Philippines , Singapore and Thailand) have been reduced to no more than 5 % .

    • More than 60 percent of the products have zero tax.
    • The average tariff has been brought down from 12% to 2 % today.

    Benefits of a member nation: Thailand

    By having joined ASEAN Thailand saw a great improvement of its economic status, especially after the ASEAN- China free trade agreement.

    This free trade agreement allowed Thailand to experience of 986 percent of fresh longan exports, 21.850 percent! For durian exports , 1911 percent for mangosteen and 150 percent for mango.

    Singapore:

    Has experience a 10% increase in GDP in 2000. Also the GDP per Capita has increased from 25219US$ to 26564US$. Singapore has also experienced an increase in literacy.

    Clearly ASEAN has helped these countries economy overall welfare grow.

15. # palmi and celineon 12 Nov 2008 at 7:05 pm

    African Economic Community (AEC)

    What kind of trading bloc is it?
    It strives to create a common market, as it removes barriers to trade between the countries, has common tariffs and wants to establish a common currency and central bank.
    Which countries are involved?
    All countries in Africa except Tunisia, Mauritania, Algeria, and Western Sahara.

    What’s the impact on this country’s economy from joining the trade bloc?
    Egypt:
    -developed energy market based on coal, oil, natural gas, and hydro power.
    -he IT sector has been expanding rapidly in the past few years

    Libya and Chad import very much electricity. By removing the trade barriers and tariffs on electricity, Egypt’s economy greatly benefits as exports increase, and therefore GDP (C+I+G+X-M) also increases.

    As we saw in Egypt there was much construction in Cairo. This shows that Egypt is developing, maybe even faster than other African countries. The AEC helps Egypt develop faster and more efficiently by trading goods and services within the continent, and providing access to the least cost centers of production. For all the construction for example, Egypt needs a lot of cement and natural resources like oil and gas. Egypt’s economy will be greatly positively influenced, and will find that it can grow and develop more easily with this beneficial access.

    The AEC also has an influence of lowering tariffs between Egypt and countries outside of the AEC, due to the common tariffs that come with the creation of a customs union.

    As can be seen from Egypt’s GDP in the recent years, it has experienced such economic growth, as expected from the influence of the union.

    2006: 375.7$ Billion grew 7.2% in 2008
    2007: 405.9$ Billion

16. # Piaon 12 Nov 2008 at 7:06 pm

    European Economic Area (EEA) - (common market)

    The EEA is composed of the;
         EFTA member countries (except Switzerland)      European Union member-states

     Austria

     Belgium

     Bulgaria

     Cyprus

     Czech Republic

     Denmark

     Estonia

     Finland

     France

     Germany

     Greece

     Hungary

     Iceland

     Ireland

     Italy

     Liechtenstein

     Latvia

     Lithuania

     Luxembourg

     Malta

     Netherlands

     Norway

     Poland

     Portugal

     Romania

     Slovakia

     Slovenia

     Spain

     Sweden

     United Kingdom

    The European Economic Area (EEA) came into being on 1 January 1994 following an agreement[1] between member states of European Free Trade Association (EFTA), the European Community (EC), and all member states of the European Union (EU). It allows these EFTA countries to participate in the European single market without joining the EU.

    The EEA Agreement provides for:
    • Participation in the internal market, with free movement of goods, services, persons and capital. This means that a product approved in one country under the common rules normally has to be accepted in the other 17 countries. Workers and students from other EEA countries are generally entitled to equal treatment with the nationals of the host country, including in the areas of social security and the recognition of occupational qualifications;

    • Harmonisation of rules and requirements to which goods and services are subject for reasons of health, safety and environmental protection and to protect consumer interests;

    • Common rules regulating competition, state aid and public procurement to ensure a level playing field for all enterprises competing in the internal market;

    • Extensive co-operation in other areas of society, most importantly in research, education, environmental protection, consumer policy, cultural affairs, social policy, gender equality, tourism and small and medium-sized enterprises.
    The EEA Agreement does not cover the EU’s customs union or its common trade policy with non-member states.

    Iceland:

    Iceland has been a member of EFTA since 1970 and has a bilateral Free Trade Agreement with the EEC since 1972. Most of Iceland’s economic and commercial relations with the EU are covered by the European Economic Agreement (EEA). It is in force since 1.1.1994 and extends the Single Market legislation, with the exception of Agriculture and Fisheries, from the EU Member States to Norway, Iceland and Liechtenstein. Through the EEA Agreement, Iceland also participates, albeit with no voting rights, in a number of EU Agencies and programs, covering i.a. enterprise, environment, education and research programs. Iceland also, along with its EEA/EFTA partners, contributes financially to social and economic cohesion in the EU/EEA. Trade in fish products is governed by Protocol 3 of the 1972 bilateral agreements and Protocol 9 of the EEA agreement. Currently the duty free entry of fish products covers over 90 % of Iceland’s exports to the EU.

17. # Moritzon 12 Nov 2008 at 7:24 pm

    The member countries of the ASEAN are:
    Brunei Darussalam
    Cambodia
    Indonesia
    Lao PDR
    Malaysia
    Myanmar
    Philippines
    Singapore
    Thailand
    Vietnam

    The ASEAN is a free trade area in South East Asia. The agreement is formed so that it cuts tariffs on goods that are traded between member countries. This allows comparative advantage inside the FTA so every country can produce what it is best at producing, focusing on allocating its resources in the best use. The ASEAN also allows the free flow of investment. The ASEAN is now looking for FTA with larger countries and trade agreements such as China and the EU.

    Vietnam, which entered the ASEAN after the Vietnam War is now a growing economy. It has profited from the ASEAN and has substantial exponential growth.

18. # Calvinon 12 Nov 2008 at 7:28 pm

    The Greater Arab Free Trade Area (GAFTA) is a free trade agreement amongst Middle Eastern countries. The agreement aims to create a trading block that can compete globally. The agreement was adopted in 1998, and the following 17 nations have become members of GAFTA:

    1 Bahrain
    2 Egypt
    3 Iraq
    4 Jordan
    5 Kuwait
    6 Lebanon
    7 Libya
    8 Morocco
    9 Oman

    10 Palestine
    11 Qatar
    12 Saudi Arabia
    13 Sudan
    14 Syria
    15 Tunisia
    16 United Arab Emirates
    17 Yemen

    However the agreement only came into effect on the 1st of January of 2005.

    The agreement states that each nation must lower its tariffs of goods by 10 percent annually. It also forces these nations to have an agricultural pact in which they share product standards. It encourages communication between nations; to liberalize both goods and services, even investments.

19. # Calvinon 12 Nov 2008 at 7:38 pm

    The Greater Arab Free Trade Area (GAFTA) is a free trade agreement amongst Middle Eastern countries. The agreement aims to create a trading block that can compete globally. The agreement was adopted in 1998, and the following 17 nations have become members of GAFTA:

    1 Bahrain
    2 Egypt
    3 Iraq
    4 Jordan
    5 Kuwait
    6 Lebanon
    7 Libya
    8 Morocco
    9 Oman

    10 Palestine
    11 Qatar
    12 Saudi Arabia
    13 Sudan
    14 Syria
    15 Tunisia
    16 United Arab Emirates
    17 Yemen

    However the agreement only came into effect on the 1st of January of 2005.

    The agreement states that each nation must lower its tariffs of goods by 10 percent annually. It also forces these nations to have an agricultural pact in which they share product standards. It encourages communication between nations; to liberalize both goods and services, even investments.

    Saudia Arabia’s GDP has exploded since Gafta was taken into effect. In 2006 GDP grew by 12.4 percent, to SR1.30 trillion ($346.9 billion). Compared to Saudia Arabia’s GDP growth in 2002 SR707 billion in 2002, SR804.6 billion in 2003, SR945 billion in 2004 and SR1,157 billion in 2005. Gafta has had a positive effect on Saudia Arabia’s GDP growth and economic developement.

20. # Meri and Natashaon 14 Nov 2008 at 5:15 am

    Central European Free Trade Agreement
    it is a trade agreement between non-EU countries in South-Eastern Europe.

    The member countries are:
    Albania
    Croatia
    Kosovo
    Macedonia
    Moldova
    Montenegro
    Serbia
    Bosnia and Herzegovina

    all these countries joined CEFTA after 2002, even though it was estabilished in 1992 but all the original countries have left CEFTA after joining the EU. CEFTA also works as a preparation for the full EU membership.

    Within these countries is a free trade area, which has positively affected Croatia as it can now trade more easily after joining CEFTA in 2003.
    Croatia’s economy suffered badly during the 1991-95 war as output collapsed and the country missed the early waves of investment in Central and Eastern Europe. However, since 2000, Croatia’s economy started to improve with a steady GDP growth of 4% to 6%, driven by tourism and increased credit-spending. Nevertheless, difficult problems still remain, including a stubbornly high unemployment rate, a growing trade deficit and uneven regional development. however, the unemployment rate has decreased since 2003, from 21.7% to 11.8% in 2008.

Leave a Reply

Name (required)

Mail (hidden) (required)

Website

Notify me of followup comments via e-mail