The emerging trading blocs in the world, such as NAFTA, ASEAN and the like, are expected to

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Q: 37 (IAS/1996)
The emerging trading blocs in the world, such as NAFTA, ASEAN and the like, are expected to

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,141,76,44,141,16,16

keywords: 

{'free trade': [0, 1, 0, 0], 'wto': [0, 1, 1, 1], 'asean': [0, 0, 10, 6], 'nafta': [0, 0, 0, 1], 'member countries': [0, 3, 1, 13], 'countries': [1, 0, 2, 6], 'agricultural commodities': [1, 0, 0, 0], 'trading': [0, 1, 0, 2], 'technology': [1, 5, 15, 27], 'world': [24, 6, 12, 21], 'permit transfer': [0, 1, 0, 0]}

Among the given options, Option 2: promote free trade on the lines laid down by the WTO, is the most accurate statement regarding the emerging trading blocs such as NAFTA (North American Free Trade Agreement) and ASEAN (Association of Southeast Asian Nations).

Trading blocs are regional agreements between countries that aim to promote economic integration and enhance trade relations. They can have various objectives, but one common goal is to facilitate and expand international trade. Let`s examine each option in detail:

1. Option 1: Act as constrictions in free trade across the world:

This option is not entirely accurate. While trading blocs may create some barriers to trade between member countries and non-member countries, their overall purpose is to reduce trade barriers among member nations. By eliminating or reducing tariffs, quotas, and other trade restrictions, trading blocs aim to enhance economic cooperation and increase market access for member states. However, it`s worth noting that there may still be some limited trade restrictions within the bloc, such as rules of origin requirements.

2. Option 2: Promote free trade on the lines laid down by the WTO:

This option is the most accurate. Trading blocs typically work in harmony with the principles established by the World Trade Organization (WTO), which aims to liberalize global trade and establish a rules-based trading system. The WTO promotes non-discriminatory trade policies, encourages the reduction of trade barriers, and discourages protectionism. Trading blocs, by aligning themselves with WTO principles, aim to foster free trade within their regions and often pursue regional trade agreements that complement the global trade regime.

3. Option 3: Permit transfer of technology between member countries:

While the transfer of technology can be a byproduct of economic integration within trading blocs, it is not the primary purpose of these agreements. The main objective of trading blocs is typically to enhance trade, investment, and economic cooperation among member countries. However, as countries within a bloc increase their trade and economic interdependence, technology transfer can naturally occur as a result of increased collaboration, investment, and knowledge sharing.

4. Option 4: Promote trade in agricultural commodities between countries of the North and South:

This option is not applicable to all trading blocs. Some trading blocs may prioritize specific sectors, such as agriculture, and aim to promote trade in specific commodities. However, it is important to note that the objectives and priorities of trading blocs can vary significantly. Not all trading blocs focus on agricultural trade or specifically between countries of the North and South. For example, NAFTA primarily focuses on trade between the United States, Canada, and Mexico, while ASEAN aims to enhance economic integration among Southeast Asian nations.

In summary, while trading blocs have diverse objectives and priorities, Option 2: promote free trade on the lines laid down by the WTO, is the most accurate statement as it aligns with the general goal of trading blocs to enhance free trade and economic integration in accordance with global trade rules.

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