Trading Bloc- case study

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Table of Contents1.0Introduction---------------------------------------------------- Page 31.1TRADING BLOCS-------------------------------------Page 31.2About MERCOSUR------------------------------------Page 32.0Discussion-------------------------------------------------------Page 42.1MERCOSUR Advantages---------------------------Page 52.2MERCOSUR Disadvantages------------------------Page 52.3Venezuela- Integrating Trade-----------------------Page 52.4 Andean Community of Nations (CAN)------------Page 63.0Conclusion-----------------------------------------------------Page 74.0Recommendations--------------------------------------------Page 7Reference List-------------------------------------------------Page 81.0INTRODUCTIONJoining a Regional trade Bloc has proven to be of great advantages to its member nations, but there are also disadvantages that these nations must consider before joining one. This report intends to examine if Venezuela's membership to MERCOSUR, South America's leading Trade block is indeed an intelligent decision.

1.1 TRADING BLOCSThe definition of a trading bloc varies widely. However, one definition that encompasses the main attributes of trading blocs and touches on the reasons that countries may have for forming such an organization is that given by the United States National Policy Association. According to this definition, a trading bloc is defined by four characteristics, it:1) participates in a special trade relationship established by a formal agreement that promotes and facilitates trade within that group of countries in preference to trade with outside nations by discriminating against non-members;2) has attained or has as a stated goal the deepening of trade liberalization or integration with the objective of establishing a free trade area, customs union, or common market;3) strives to reach common positions in negotiations with third countries, with other trade blocs, or in multilateral forums; and4) attempts to coordinate national economic policies to minimize disruption to intra bloc economic transactions.

(Bernal 1997.3)1.2 About MERCOSURMERCOSUR is an organization with an important operating network specially in Argentina, Brazil, Chile, Uruguay and Paraguay it offers specialized services in international trade aiming that customers/members could get an advanced increase in their business profitability, risks spread and enhanced competitive conditions. The MERCOSUR trade bloc is the fourth largest integrated market after the European Union (EU), North American Free Trade Agreement (NAFTA) and Association of South-East Asian Nations...