Trade blocs are generally groups of countries in certain regions that manage and encourage commercial activities. Trade blocs lead to trade liberalization (free trade of protectionist measures) and the creation of trade between members, as they are treated positively compared to non-members. However, trade is also expected to divert non-members, particularly when protectionist measures are imposed on non-members. Trade diversion runs counter to WTO objectives and distorts the comparative advantage of trade creation when a country enters a free trade/agreement or is engaged in a customs union in which there is free trade between its members, but also a common external tariff. Among the most elaborate ATRs are rules on investment flows, coordination of competition policies, agreements on environmental policies and the free movement of workers. The absence of import duties and other barriers reduces the costs of cross-border trade in goods and services. So Kenya can do more. B trade with Ethiopia , so-called intra-regional trade and is weak in sub-Saharan Africa. Listeners want students to build coherent chains of analytical arguments in their economic documents in order to achieve a higher level in the brand scheme. Here is an example of this question: „Look at how a free trade area could stimulate economic growth in sub-Saharan Africa.“ In recent years, there has been a flood of bilateral trade agreements between countries and the emergence of regional trading blocs. The European Union now has more than 30 separate international trade agreements, including those with countries such as Colombia and South Korea.
As a result, prices for traded goods and services are expected to decline as trade stimulates increased competition and can, therefore, improve labour productivity and help firms achieve internal economies of scale. The TTIP has sparked much discussion among supporters and opponents. The Guardian also has a useful summary here. Some of these agreements are free trade agreements that include a reduction in import customs and non-tariff controls in order to liberalize trade in goods and services between countries. The Trans-Pacific Partnership (TPP) would link 11 Pacific economies – including Japan and Singapore – to the United States. Together, these 12 countries account for 40% of global GDP and one third of trade. Meanwhile, the Transatlantic Trade and Investment Partnership (TTIP) is an ambitious trade agreement between the US and the EU. This means that the free trade agreement could lead to increased capital expenditure, which will lead to a long-term shift in overall supply outwards. This can lead to an increase in their potential growth rate in the countries concerned.