I (Meaning and importance of Exports) Unit Structure

CHECK YOUR PROGRESS: 
 
1. Explain the following terms briefly:
 
a. Economic Integration
 
b. Preferential Trade Arrangement
 
c. Free Trade Area
 
d. Customs Union
 
e. Common Market
 
f. Economic Union
 
g. Trading Blocs
 
 
2. Fill in the blanks:
 
a. Some of the prominent trading blocs include European 
Union are--------------------------------------------. 
b. European Economic Community (EEC) got converted into ---
---------------------------in 1993.
c. European Union has a common currency which is -------------- 
d. The best example of Customs Union is ----------------------------
-------- came into existence in 1957.
 
e. Today European Common Market is known as---------. 
f. Best example of Preferential Trade Arrangement is ------------ 

---

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4.6 NORTH AMERICAN FREE TRADE AGREEMENT 
 
(NAFTA) 
The North American Free Trade Agreement (NAFTA) is 
the most powerful trade bloc in the world. The members of the bloc 
are USA, Canada and Mexico. This bloc came into operation in 
1994. The NAFTA is basically a trade and investment agreement 
with a view to reduce barriers on the flow of goods, services and 
people among the three counties. The agreement covers only 
goods and services manufactured/produced in North America or if 
imported goods and services that meet certain local content 
requirements, the nationality of ownership does not matter, as long 
as such local content requirements are met. 
NAFTA has a total population of 360 millions. Its formation 
is an attempt to gain comparative advantage against the enlarged 
European Union and to out pace the EEA. 
This trade agreement is quite comprehensive and covers 
many areas such as tariff reduction, free movement of 
professionals among the member countries, financial and direct 
investment matte
rs and consumer safety. There are “side 
agreements” relating to protection of labour and protection of the 
natural environment. The NAFTA treaty envisages elimination of all 
trade and investment restrictions among the member countries over 
a period of 15 years.