I (Meaning and importance of Exports) Unit Structure

4.4 TRADING BLOCS 
A trading bloc is a group of countries, which is formed for the 
purpose of economic, social and cultural developments in the 
region. Some of the prominent trading blocs include European 
Union, NAFTA, ASEAN, SAARC etc. 
The main objective of trading 
blocs‟ are- 
To reduce or if possible to eliminate trade barriers among 
member nations. 
To promote free transfer of labour, capital and other factors 
of production. 
To maintain better cultural, social and political ties with each 
other. 
To assist member nations in any possible way with special 
reference to international trade. 
To promote growth of the region through mass production 
and marketing of goods. 
To bargain collectively with the non-members by means of 
their collective strength. 
To impose common external tariff and non-tariff barriers on 
non-members. 
4.5 EUROPEAN UNION (EU) 
 

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4.5.1 Introduction 
 
This was originally established as European Common 
Market by the treaty of Rome in 1957, and came into operation in 
1959. The founder members of the community were France, West 
Germany, Italy, Belgium, Netherlands and Luxembourg. In 1973 UK 
joined the community. Today it is known as EU, and comprises 
Belgium, Denmark, France, Greece, Ireland, Italy, Netherlands, 
Portugal, Spain United Kingdom, Germany, Luxembourg, Finland, 
Austria and Sweden. 
The association has advanced to the extent of removing 
most trade barriers and allowing free movement of persons and 
goods within the union. They have also established a European 
Parliament for which member are selected from each country on 
proportionate basis, and are given powers to legislate may issues 
which are them ratified by the governments. 
They have a common currency which is the Euro.