Question

Answer the following question in about 30 words.

What benefits do nations get by forming trading blocs?

Answer 1

Countries with geographical proximity, similarity and complementarities in trading items form trading blocs. These develop in response to the global organisation’s failure to speed up intra-regional trade.

The main benefits arising from trade blocs are:

• Increase intra-regional trade by removing trade tariffs within member nations.
• Have a greater say in the international market, as they have more power as a trading bloc than as individual nations.