Inefficient producers inside the block can be protected from more efficient producers outside the block. For example, inefficient European farmers can be protected from cheap imports from developing countries. Trade diversion occurs when trade is diverted from efficient producers outside the commercial territory. The idea is that member countries trade freely with each other, but erect barriers to trade with non-members, which has had a significant impact on the structure of world trade.  European Community, “What is Europe`s trade policy?” (European Communities, 2009) trade.ec.europa.eu/doclib/docs/2009/may/tradoc_143154.pdf Although the formation of trading blocs such as the European Union and NAFTA (North American Free Trade Agreement) has led to the creation of trade between members, it is also more difficult for countries outside the bloc to trade, resulting in so-called trade diversion. where an undertaking which would otherwise have been able to carry out its activities in that country is prevented from doing so by a trading bloc and obstacles vis-à-vis third countries. CHAPTER 3: ANALYSIS OF REGIONAL TRADING BLOCS 3.1 Analysis of selected regional BLOCS 3.1.1 THE EU 3.1.2 NAFTA 3.1.3 ASEAN 3.1.4 MERCOSUR The creation of commercial start-ups is the shift from a cheaper source of production to a more profitable source of supply following accession to a trade agreement. Pacific Alliance – 2013 – a regional trade agreement between Chile, Colombia, Mexico and Peru Free trade areas, the logical evolution of free trade agreements, will most likely be implemented until all the separate agreements form a larger, almost completely universal agreement. The Council has a crucial role to play in drawing up a new trade agreement.
The first aspect of the above-mentioned trading blocs is in line with the mission of the World Trade Organization (WTO) and its predecessor, the General Agreement on Tariffs and Trade (GATT). The principle of non-discrimination in gatt provides that no Member State may present disadvantages for Member States in world trade between GATT members.  At the same level, the WTO provides an enabling environment for the negotiation of agreements to reduce barriers to international trade and ensure that trade is based on openness, thereby contributing to economic growth and development.  In particular, although trading blocs have different structures, they are based on the same objective of removing barriers to trade between Member States.  The number of trading blocs in the world has increased considerably. A notable example is the European Union (EU), which completed the Single Market Programme in 1992 and launched a historic plan for monetary union.  Similarly, Canada, Mexico and the United States concluded the North American Free Trade Agreement (NAFTA) in 1994 […].