Question

write short note on regional economic grouping about 250 words.

Answer 1

Answer:

Regional Economic Groups are the associations of countries situated in a particular region whereby they come to a common understanding regarding rules and regulations to be followed while exporting and importing goods among them. Such groups have liberal rules for member countries while a separate set of rules is laid for non-members.

Explanation:

For example,

the European Union (EU) the association of South-east Asian Nations. these groups are popularly known as trading blocs.Economic regionalisation can be viewed as one of the ma'or instruments of promoting international trade activities among countries through removal of barriers to mutual trade in goods and services by means of free trade areas! customs union and other preferential trade arrangements. further! linkages may be stimulated through freer international exchanges of capital and labour.)hen two or more countries come together to form a regional trade grouping! that will have two types of effects. the first is the trade creating effect! which will increase the national income in the participating countries. the second will be the trade diversion effect! meaning a resulting change in the direction of trade activities in favour of the member countries and against non-members. this actually implies disadvantages and losses on the part of the non-member countries. or this reason! the formation of trading bloc is very important issue not only for the signatory countries but also for the non-member countries.

Economic groupings  of the countries of the same region or areas increases the size of market! aggregate demand for products and services! overall! productivity! employment and ultimately economic activity of the region. "t the same time! people of the region get a variety of products at comparatively lower prices. the number of regional groups has grown rapidly in recent decades. +ore than one-third of world trade now taxes place within such groups. within the framework of the globalisation efforts conducted under! first! the General  agreement on tariffs and trade , and second,the world trade ,organisation , the utmost importance was given to the principle of non-discrimination at the international and national levels. the first principle is known as the most-favoured nation  clause and required that any trade concession extended to a country must be automatically and immediately applied to all other members.