Question

Why were regional trade blocs formed?

Answer 1

Regional Trade Blocs have come up in order to encourage trade between countries with geographical proximity, similarity, and complementarities in trading items and to curb restrictions on the trade of the developing world. Today, 120 regional trade blocs generate 52 percent of the world trade. These trading blocs developed as a response to the failure of the global organisations to speed up intra-regional trade. Though, these regional blocs remove trade tariffs within the member nations and encourage free trade, in the future it could get increasingly difficult for free trade to take place between different trading blocs.