Free Trade Block

Free Trade Bloc Group of countriesExistence within a geographical region.Motive is to protect themselves from the imports of non-

membersA form of economic integration increasingly shaping

the pattern of world trade.

TYPES OF TRADING BLOCS

Major Types of Trading Blocs:-1.Preferential Trade Area (PTA’s)2.Free Trade Area3.Customs Union4.Common Market

MAJOR TRADE BLOCS

A. EU (European Union)largest trading bloc in the world

B. NAFTA (North American Free Trade Agreement)C. OPEC (Organisation of Petroleum Exporting Countries)D. ASEAN (Association of South East Asian Nations)E. SAARC ( South Asian Association for Regional

Cooperation)

Advantages of Free Trade Bloc

• Economic integration• Increase in Trade• Employment opportunities• Benefit to the consumers• Development• Protection from others goods

Importance of free trade block for Pakistan India

and Afghanistan

Problems of Afghanistan

• Land lock country• No infrastructure• Poor economic condition• Security issues• No investment• More than twenty year in civil war ( 11 year with Russia

And 10 year American with Afghan Talban )

Advantages for Afghanistan

• Can freely use Pakistani sea port for trade• Can use Pakistani and Indian product at less price• Can sell freely his product e.g : dry fruits in Pakistani and

Indian market• Transportation cost will be decrease in import and export

with India

Pak- Afghan TradeYears Afghan Exports Pakistan Exports2007-8 $91.3 m $1143.6 m 2008-9 $93 m $1398 m 2009-10 $139 m $1572 m 2010- 11 $172 m $2336.7 m 2011- 12 $287 m $2.1 b

Afghan- India TradeYears Afghan Exports India Exports

2007-8 $109.97 m $249.21 m2008-9 $126.24 m $394.23 m2009-10 $125.19 m $463.55 m 2010- 11 $146.03 m $411.78 m2011-12 $142.57 m $506.14 m

Problems in Pakistan

• Less production due to Energy crisis• To much taxes on imported items• Low investment • Burden of returning the loan• Political interface in production of some goods

Advantages for Pakistan

• Can sell their product at large market• Can buy product at less price• Can expand market access, economic growth, energy

benefits, and regional stability.• can be able to trade with Nepal ,Bhutan and Bangladesh

Pak- India TradeYear Pakistan Exports Indian Exports

2007-8 $254.85 m $1701.4 m2008-9 $319.61 m $1194.6 m 2009-10 $268.33 m $1225.5 m2010-11 $137.38 m $828.81 m 2011-12 $226.16 m $694.25 m

Pak- Afghan TradeYears Pakistan Exports Afghan Exports

2007-8 $1143.6 m $91.3 m2008-9 $1398 m $93 m2009-10 $1572 m $139 m2010- 11 $2336.7 m $172 m2011- 12 $2.1 b $287 m

Problems in India

• BJP , RSS and Shiv Sena• Hesitation about the Muslims with in country • Hatred emotional bout Pakistan

Advantages for India

• Can buy crop products , cements etc at less price• Can sell products in Pakistan and afghan market• Transportation cost will be less in import or export with

Afghanistan•  possibilities of transit trade and market access beyond

Pakistan into Central Asia

Disadvantages for All Countries

Every country has more advantages than its disadvantages

Local companies profits will be less by importing goods of International Companies

India-Pakistan TradeYear India Exports Pakistan Exports

2007-8 $1701.4 m $254.85 m2008-9 $1194.6 m $319.61 m2009-10 $1225.5 m $268.33 m 2010-11 $828.81 m $137.38 m2011-12 $694.25 m $226.16 m

India-Afghan TradeYears India Exports Afghan Exports

2007-8 $249.21 m $109.97 m 2008-9 $394.23 m $126.24 m 2009-10 $463.55 m $125.19 m 2010- 11 $411.78 m $146.03 m 2011-12 $506.14 m $142.57 m

The End