The paper "Free Trade Agreement and Economic Blocs" is a perfect example of macro and microeconomics coursework. In the recent past, various countries have been involved in engaging in economic integration. Economic integration is defined as an arrangement existing between different regions which is widely marked by minimal or elimination of trade barriers through the harmonization of economic and monetary policies. In simpler terms, it refers to the elimination of both non-tariff and tariff barriers to flows of factors of production, services and goods between different regions of a nation or group of the nation (Christiansen 2006).
The aim of the nation engaging in economic integration is to minimize costs for producers and consumers as well as maximizing on trade between nations taking part in the agreement. This study will widely focus on determining whether economic bloc and free trade agreements are building blocks or stumbling blocks in relation to regional economic integration as far as liberalized trade is concerned. It is quite evident that trade facilitation has recently become a hot debate between scholars and policymakers. According to Christiansen (2006), while many economic tariffs are becoming more liberalized, trades across the globe are encountering problems of moving goods and services across the borders.
Researches indicate that trade facilitation by way of economic integrations reforms are broadly increasing international trade and the impact displayed by these integrations is considered to be significant especially those in relation to tariff elimination. Because economic integration requires a broad comprehensive approach, most researchers are currently grappling with the debate of understanding whether economic bloc and free trade agreements are stumbling block or building block as far as liberalized trade is concerned.
The paper will employ a broad definition of key terms that facilitate economic integration. David (2009) asserts that economic integration measures under the Free Trade Agreement (FTA) and the economic bloc are very important because the substantial non-tariff barriers existing among FTA members. It is quite observable that even with the elimination of tariffs by many nations, goods and services may not be traded smoothly even between FTA members. Further, while various multilateral organizations such as world Custom Organizations (WCO) and World Trade Organizations greatly focus on the creation of international principles and standards of economic integration, various concrete measures need to be implemented at both bilateral and regional segments.
This is because both regional and bilateral levels of trade liberalize trade that greatly entails coordination in terms of facilitating trade flows. 2.0 Scope of the argument In the past, free trade agreements in relation to economic integration were highly regarded as precursors to interior oriented economic blocs thus being considered as stumbling blocks. However, this argument has shifted from being a stumbling block to building blocks since they are been considered to have a positive impact on global trade liberalization.
This study will, therefore, focus on discussing Free Trade agreements and economic blocs as building blocks rather than stumbling blocks as far as trade liberalization are concerned. 3.0 Stages of economic integration As global trade and investment level continue to increase, it is quite notable that economic integration between nations is also broadening. The known economic integration include the European Union (EU), North America Free Trade Agreement (NAFTA), Mercado Comun del Cono Sur (MERCOSUR) and Association of Southeast Asian Nations (ASEAN).
Although it is quite obvious that most relationships between countries do not follow a certain precise pattern, economic integration which is formally perceived to follow stages which initially focus on removing the various trade barriers thus establishing a strong economic union (David 2009).
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