TRADING BLOCKS AND INTRAREGIONAL

TRADING
ASEAN and SAARC

Supriyo Chakraborty
Reg no.-5044
 Definition
• Regional trade blocks are intergovernmental
associations that manage and promote trade
activities for specific regions of the world

• They have political as well as political implications for

example the European union , the worlds largest
trading block has harbored political ambitions. The
Maastricht treaty which gave birth to EU calls for
joint policies in regard to military , defense, and
citizenship.
 MAJOR TRADE BLOCKS
• 1) EUROPEAN UNION (EU)
• 2) NORTH AMERICAN FREE TRADE AGREEMENT
(NAFTA)
• 3)SINGAPORE –AMERICAN FREE TRADE
AGREEMENT(SAFTA)
• 4) ORGANISATION OF PETROLEUM EXPORTING
COUNTRIES (OPEC)
• 5) ASSOCIATION OF SOUTH EAST ASIAN NATION
(ASEAN)
• 6) SOUTH ASIAN ASSOCIATION OF REGIONAL CO-
OPERATION (SAARC)
 ASEAN
• Established in 1967 .
• 5 founding members : indonesia , malayasia,
phillipines, singapore and thiland.
• Later on joined by brunei, myanmar,vietnam etc.
• Asean free trade area (afta) .
• Asean beyond trade has political role as visible by
the formation of asean regional forum of which
china, india and usa are members.
• Asean as a trading blocK has been a huge success
leading to prosperity and elimination of poverty in
the member country
 AREAS OF COOPERATION
• Agriculture and Rural Development;
• Health and Population Activities;
• Women, Youth and Children;
• Environment and Forestry;
• Science and Technology and Meteorology;
• Human Resources Development; and
• Transport.
• Recently, high level Working Groups have also been
established to strengthen cooperation in the areas of
Information and Communications Technology,
Biotechnology, Intellectual Property Rights, Tourism, and
Energy.
 SAARC
• Born in 1985
• 7 members countries :bangladesh, bhutan,
india,maldives,nepal,pakistan and sri lanka
• It has 1.3 billion inhabitants
• Represents 22% of the world population but only 1.9%
of the world gnp.
• Saarc has been a sheer failure.
• The total external trade of the region – 0.8% of world
exports and 1.3% of world imports
• The reason being political dispute between member
countries
 CONTD…….
• Still some progress has been achieved
• Sapta (south asian preferential trading
agreement) has come into force in 1995
• Consensus on safta(south asian free trade
area)has been reached
 ASEAN SAARC

Cambodia India
Indonesia Sri lanka
Laos Bangladesh
Malaysia
Nepal
Myanmar
Bhutan
Philippines
Pakistan
Singapore
Thailand Afghanistan
VietNam Maldives
Brunei Darussalam
 NOW

WHY ASEAN IS SUCCESSFUL AND SAARC HAS

BEEN UNSUCCESSFUL?
o Asean is one of the major trading blocks in the
world
o It represents 420 million people.
o It's a larger trade block than north America and
western Europe.
o Saarc represents 22% of humanity.
o There is a contradiction, an irony between
asean & saarc.
o While asean has been a roaring success & called
asian tigers ,saarc has been a sheer failure.
 REASONS…..
• In asean all countries are of equal geographic size.
• Level of economic development is the same in all
countries.
• Common fear of communist china
• All of them had similar economic policies.THEY ALL
INTRODUCED ECONOMIC LIBERALIZATION IN 1960s
WHICH FURTHER ACCLERATED ECONOMIC GROWTH.
• Way of functioning of asean based on two principles:
1.Musyaurarah(consensus).
2.Mufakat(consulatations).
Indias TRADE WITH ASEAN IS MORE THAN 20
TIMES THAN IN CASE OF SAARC.
In south Asia India is the largest country.It
occupies more than 70% of geographical area.
So other nations feel that strengthening saarc
means empowering India.
Serious bilateral disputes between two major
south asian powers i.e INDIA & PAKISTAN.
Bilateral disputes and differences between other
member countries.
 India , Bangladesh dispute.
 India ,Nepal dispute.
 Nepal Myanmar dispute.
 Pakistan Bangladesh dispute
• Vast difference in economic development..
• India is a developed economy of south asia
.Other countries are less developed.
• Purchasing power of these countries is very
low . They cannot act even as a market of
Indian goods.