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2022-02-16

Groupings of Countries with Trading Agreements Are Called

When it comes to international trade, countries often form agreements in order to facilitate the exchange of goods and services. These agreements can take many forms, from bilateral agreements between two countries to multinational agreements that involve multiple countries. However, regardless of the specific form that these agreements take, they are generally referred to as ” trading blocs ” or ” economic communities .”

A trading bloc is a group of countries that have agreed to reduce or eliminate trade barriers between them. This can include reducing or eliminating tariffs (taxes on imported goods) or quotas (limits on the amount of a particular good that can be imported). By doing so, members of the trading bloc can increase trade between themselves, which can lead to increased economic growth and prosperity.

There are several well-known trading blocs in existence today, including the European Union, the North American Free Trade Agreement (NAFTA), and the Association of Southeast Asian Nations (ASEAN). These blocs include countries from specific regions or continents and are generally designed to promote economic integration and cooperation among their members.

In addition to trading blocs, there are also economic communities, which are similar in nature but can include a wider range of economic activities beyond trade. For example, the European Economic Community (EEC) was initially formed in the 1950s as a trading bloc between six European countries. Over time, it evolved into the European Union (EU), which includes not only trade but also a range of other economic activities, such as the free movement of people, capital, and services.

Overall, the groupings of countries with trading agreements are called trading blocs or economic communities. These arrangements are designed to promote economic cooperation and integration among their members, and can have a significant impact on trade and economic growth both within and outside of the bloc. As the world becomes more interconnected, it is likely that we will continue to see the formation of new trading blocs and economic communities in the years to come.

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