Quick Reference

An alliance of governments, groups, or parties with a common purpose. Trading blocs, such as the North America Free Trade Agreement are usually geographically contiguous. Poon et al. (2000) TIBG25, 4 dismiss the notion that international trade is increasingly organized around, three economic blocs centred around the United States, European Union, and Japan—the ‘triad’—and show that investment intensity patterns do not currently conform to any bloc-like formation, but exhibit instead globally diffused network regions. Badinger and Breuss (2006) Rev. Int. Econ. 14, 4 investigate the gains for each member from enlarging a trade bloc, finding that small countries increase in competitiveness by attaining easier access to a larger market, while large countries may have advantages over small countries via relatively more group ties, high market power, and related terms-of-trade effects, advantages in competitiveness due to economies of scale and larger absolute endowments (particularly human capital), larger product varieties (reflecting the greater scope for specialization), and technological advantages.

Subjects: Earth Sciences and Geography.

Reference entries