Trading blocs are usually groups of countries in specific regions that manage and promote trade activities. Trading blocs lead to trade liberalisation and trade creation between members, since they are treated favourably in comparison to non-members. The World Trade Organisation (WTO) permits the existence of trading bloc provided that they result in lower protection against outside countries than existed before the creation trading bloc.
The most significant trading blocs currently are:
1. European Union (EU): A customs union, a single market and now with a single currency.
2. European Free Trade Area (EFTA)
3. North American Free Trade Agreement (NFATA) between the USA, Canada and Mexico.
4. Mercosur: A customs union between Argentina, Brazil, Paraguay, Uruguay, and Venezuela.
5. Association of Southeast Asian Nations (ASEAN)
6. Association of Free Trade Area (AFTA)
7. Common market of Eastern and Southern Africa (COMESA)
8. South Asian Free Trade Area (SAFTA) created in 2006 with countries such as India and Pakistan.
9. Pacific Alliance: 2013 – a regional trade agreement between Chile, Colombia, Mexico and Peru.
