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Q37 (IAS/1996) Economy › External Sector & Trade › Regional trade agreements Answer Verified

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

Result
Your answer: —  Â·  Correct: A
Explanation

Regional trading blocs like NAFTA and ASEAN lower or eliminate tariffs among members and thus promote intra-bloc free trade, but they can also fragment the global trading system by creating preferential arrangements that redirect trade and make multilateral liberalization harder. For example, regional blocs now account for a large share of world trade and, while they remove internal tariffs and encourage intra-regional trade, they may make free trade between different blocs increasingly difficult [1]. The WTO analysis further notes that preferential trade agreements (PTAs) often arise in place of multilateral cooperation and can involve deeper, non‑tariff rules, thereby complicating overall global free‑trade integration [2].

Sources

  1. [1] FUNDAMENTALS OF HUMAN GEOGRAPHY, CLASS XII (NCERT 2025 ed.) > Chapter 8: International Trade > Regional Trade Blocs > p. 74
  2. [2] https://www.wto.org/english/res_e/booksp_e/anrep_e/wtr11-2c_e.pdf
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