When there are treaties between several countries, they agree to a commercial agreement that benefits all the parties involved, to develop their capital and investments, facing a number of challenges in which the economic structures of all of them are affected.
Economic blocs have advantages and disadvantages, since as well as creating possibilities for new international businesses and communication of the same level, it also creates controversy among people who do not agree with the effects that it can create on some human rights , and even against the environment.
What does economic block mean?
This refers to the set of countries that agree to form a group that seeks economic liberation, develops it, and a commercial link with which companies can have more sales options, revaluing their economy.
Types of economic blocks
The economic blocks are divided into several types, which are classified according to the commercial integration they have, and also by the established agreements, which can affect even the currency used in several countries, such as the Euro, which is used in different countries. of the European continent.
Customs agreements
This refers to the union of customs control and the application of tariffs to countries or economic blocks not belonging to those that apply them, fortifying the customs of the states that are within the agreement, and in turn benefiting free trade between the countries. themselves.
These types of agreements seek to hinder trade from other countries, which may be interested in participating due to the possible existence of an optimal commercial fluidity, they would be affected by customs regulations applied jointly by this group.
Economic complementation agreements
These aim to open up more production markets, they practice bilateral agreements that allow them to get more merchandise, and fewer restrictions at the level of tariffs, which allows better merchandise between the countries involved.
In Latin America there is ALADI, which is the “Latin American integration association which represents a legal framework for marketing among Latin American countries, forging a more powerful economy at the continental level.
Economic community
It is about the union of the states to forge a single entity which governs all customs and tariffs of the countries of that community, forming a more united economic bloc, because they function as one.
The European community is the most relevant of this type, covering a large territory of this continent, and even creating a currency that is used in all participating regions. This community has gone further from the commercial sphere, and has begun to establish political ties, which affect the decision-making of the states, or who take them together.
Free trade areas
Being one of the categories that makes the least contribution to economic progress, which basically eliminates certain barriers between two or more countries, although it does not eliminate all of them, it continues to benefit both parties in a situation only of trade.
It is based on the exchange of products and labor factors between the concordant nations, but it continues to maintain its customs barriers in terms of third parties. It is one of those that least reflects economic freedom to its parts.
Economic union
It is when the signatory countries agree to unite not only in the economic sphere, but also in the political sphere, which allows forging an alliance of great trust between the parties, which provides job opportunities to the communities of both regions, and which comprise international markets as a whole.
When speaking in economic terms, it is said that this type of economic bloc is the most powerful, since it not only seeks to improve the economy and trade between the participating countries, but also establishes a political-economic union.
In the United States of America, this type of agreement can be observed, in which the entities that govern the laws applied to trade work in common, and the currency used throughout the territory is the United States Dollar (USD), demonstrating the unity that has been achieved in that part of the American continent, also called the new continent.
Features
One of the main characteristics of these is globalization, which implies the growth of unity that exists in humanity between its different countries, at all levels, such as cultural, social, political and the most important and main of this issue. the economic one.
The unions that the economic blocs achieve can exceed the levels of trade, reaching the political and therefore the legal, obtaining a common good objective in the societies that are integrated into these.
Advantages and disadvantages of economic blocks
These have very positive advantages for the economic, political and social environment, but since not everything can be perfect, it has factors of which not everyone is proud, and that affect the quality of life of some people, animals and the environment.
Advantages
- It takes the economy to international levels by creating global markets that trade at higher levels than national markets.
- New, more efficient means of communication are created and used, such as the internet, which has revolutionized all forms of communication.
- It involves the growth of companies, and their mergers, due to the large number of demands that are created between countries.
- New international markets are created and, in turn, those that already exist seek to renew themselves in order to compete at the high levels that this requires.
- Due to the great international communication that these achieve, the cultures of other countries are spread more quickly and efficiently.
- Science evolves in an incredible way, due to the fact that more and more experiments are carried out between entities from different countries, working together.
- Certain rules or regulations are removed from the world economic system, giving it more freedom of action.
Disadvantages
- The export of possibly dangerous substances to other countries where their components are completely unknown and how they can affect them.
- Excessive consumerism, due to a product that generates need in the population, which creates a lot of demand for a specific product.
- It can generate little conditions that affect the quality of life of workers due to the high rate of production that these markets need.
- In relation to excessive consumerism, animal and even plant species could disappear.
- People who do not agree with these terms, would opt for rejection by protesting and in extremist cases by practicing terrorism.
very good