Economic blocs such as the European Union promote trade liberalization and seek to promote economic growth.
An economic bloc is a group of countries that come together to achieve commercial benefits . Its creation is usually carried out through the signing of an international treaty .
The economic blocs aim to enhance international trade between their members. They also help drive transactions between the members of the group, who act in a coordinated or unified manner, and the rest of the world.
Characteristics of an economic block
Typically, economic blocks are developed with nations that are geographically close. In this way, they are usually regional entities .
However, there are cases of economic blocks that are created by virtue of the production of the same good. Thus, the countries that group together have shared interests that obey the nature of their resources.
Economic blocs lead member countries to develop common policies. The establishment of free trade zones and the establishment of single tariffs for commercial operations among themselves are some of the most frequent measures.
The European Union (EU)
The European Union (EU) is an example of an economic and political bloc. It is made up of 27 European States, being in force since November 1, 1993 as established by the Treaty of Maastricht .
The background of the EU lies in a series of agreements that were signed after the Second World War . In 1958 , meanwhile, the so-called European Economic Community was created with seven members: Italy , France , Germany , the Netherlands , Belgium and Luxembourg .
This community is considered the starting point of the EU , which allowed the implementation of a single market of large proportions and a single currency (the euro ) that is used in 19 nations. In this EU single market , the free movement of capital, services, goods and individuals is allowed.
It is important to mention that the functioning of the EU is based on the principles of representative democracy . All countries are represented in the Council of the EU and in the European Council , while citizens have direct representation in the European Parliament .
This economic and political bloc was awarded the Nobel Peace Prize in 2012 . This award recognized the EU 's contributions to peace, human rights and democracy in the Old Continent.
In emerging economies, economic blocs aim to combat poverty and promote economic stability.
MERCOSUR, the most important economic bloc in South America
The Southern Common Market ( MERCOSUR ) is the most important economic bloc in South America . Its foundation took place in 1991 by Brazil , Argentina , Uruguay and Paraguay , which signed the Treaty of Asunción .
Over time, MERCOSUR incorporated Venezuela (a country that is currently suspended), while Bolivia is in the accession process. In addition, there are six associated States: Colombia , Peru, Chile , Ecuador , Suriname and Guyana .
MERCOSUR signed common tariff agreements and a free trade area. Thanks to these agreements and other measures, progress was made in the economic integration of its members and also at the political and cultural level.
The Common Market Council (CMC), the Common Market Group ( GMC ), the Mercosur Trade Commission ( CCM ) and the Mercosur Parliament ( PM , also called Parlasur ) are some of the most relevant bodies and institutions of this bloc. economic.
Promoting competitiveness, innovation and sustainable development is one of the missions of an economic bloc.
Other American agreements
The Andean Community (CAN) is another economic and political bloc on the American continent. It has Colombia , Peru , Ecuador and Bolivia as members and Argentina , Uruguay , Paraguay , Chile and Brazil as associated states.
The CAN also allowed the formation of a free trade zone: among its members, products can circulate without paying tariffs of any kind. It also established the free movement of people, with which citizens of these countries can enter any nation in the bloc without requiring a passport.
Honduras,El Salvador, Guatemala,Costa Rica, Nicaragua,Panama,Dominican Republic yBelize, por su parte, integran elCentral American Integration System (SICA). Varios de estos países se unieron en un bloque económico denominado Central American Common Market (CACM).
There are also agreements that help promote exports and imports, although they do not specifically give rise to an economic bloc. In this context we can name the North American Free Trade Agreement (NAFTA) , which created a free trade area between Mexico , the United States and Canada .
Economic blocks in Africa, Asia and Oceania
To boost economic development and investments, economic blocs also exist in Africa , Asia and Oceania .
The African Union (AU) is made up of 55 African countries that cooperate with each other for development. It aims to create a common market, a customs union and a free trade area in the future.
The Association of Southeast Asian Nations (ASEAN) has ten members: Thailand , Indonesia , the Philippines , Vietnam, Malaysia , Cambodia , Singapore , Laos , Brunei and Burma . A single market and a free banking zone are some of its achievements.
If we focus on Oceania , we find the Pacific Islands Forum . It consists of Australia , New Zealand , Tonga , Samoa, Fiji , Solomon Islands , Cook Islands , Papua New Guinea , New Caledonia , Niue , Vanuatu , Tuvalu and French Polynesia .
Although many of these entities are not strictly an economic block, they have among their objectives the promotion of the economy .