. Regional trading refer to a treaty that is signed by two or more countries to encourage free movement of goods and services across the borders of its members. The agreement comes with internal rules that member countries follow among themselves. When dealing with non-member countries, there are external rules in place that the members adhere to.
Need for Regional Trading
- Even though it is widely accepted that trading with the ROW is far more beneficial for economies, over 60 per cent of the global trade is through 200 odd regional blocs in the world. Economies are being driven towards regional trading out of domestic compulsions of looking at newer markets for their products outside domestic
- Regional trading allows for judging of competitiveness and acceptability of domestic
- It enables all the trading partners to collectively have a ‘larger’ voice in the international arena on international issues.
- Regional trading is always meant to achieve penetration of markets, increased trade and host of other objectives such as economic cooperation, jointly addressing issues of energy, environment, political consensus on global issues, etc.
- It provides for greater bonding across regions facilitating investment in economics.
- It opens economies for tourism, exchange programmes achieving greater degree of cohesion among member countries.