Chapter 6: Identify the key current regional trade blocks
6.1. European Union (EU)
European Union (EU), international organization comprising 27 European countries and governing common economic, social, and security policies. Originally confined to western Europe, the EU undertook a robust expansion into central and eastern Europe in the early 21st century. The EU’s members are Austria, Belgium, Bulgaria, Croatia, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, and Sweden. The United Kingdom, which had been a founding member of the EU, left the organization in 2020.
The EU was created by the Maastricht Treaty, which entered into force on November 1, 1993. The treaty was designed to enhance European political and economic integration by creating a single currency (the euro), a unified foreign and security policy, and common citizenship rights and by advancing cooperation in the areas of immigration, asylum, and judicial affairs. The EU was awarded the Nobel Prize for Peace in 2012, in recognition of the organization’s efforts to promote peace and democracy in Europe.
Source:
Britanica. (2023). European-Union.
6.2. North American Free Trade Agreement (NAFTA)
The Canada-U.S.-Mexico-Canada Agreement (CUSMA) entered into force on July 1, 2020, replacing the North American Free Trade Agreement (NAFTA).
The North American Free Trade Agreement (NAFTA), which was enacted in 1994 and created a free trade zone for Mexico, Canada, and the United States, is the most important feature in the U.S.-Mexico bilateral commercial relationship. Tariffs on all covered goods traded between Canada and Mexico were eliminated in 2008. Tariffs on covered goods traded between Canada and the United States became duty free on January 1, 1989
NAFTA has had an overwhelmingly positive effect on the Canadian economy. It has opened up new export opportunities, acted as a stimulus to build internationally competitive businesses, and helped attract significant foreign investment.
NAFTA provides coverage to services except for aviation transport, maritime, and basic telecommunications. The agreement also provides intellectual property rights protection in a variety of areas including patent, trademark, and copyrighted material. The government procurement provisions of the NAFTA apply not only to goods but to contracts for services and construction. Investors are guaranteed equal treatment to domestic investors in the U.S., Mexico and Canada.
In 2016, total trilateral merchandise trade, as measured by the total of each country’s imports from its other two NAFTA partners, amounted to nearly USD $1.0 trillion – more than a threefold increase since 1993. In 2016, NAFTA partners represented 28% of the world’s gross domestic product (GDP) with just less than 7% of the world’s population. Since the implementation of NAFTA, the North American economy has expanded, with the combined GDP for Canada, the U.S. and Mexico reaching USD $21.1 trillion in 2016.
Source:
Global Affairs Canada. (2018) North American Free Trade Agreement (NAFTA) – Fast Facts
International Trade Administration. (2023). North American Free Trade Agreement (NAFTA).
