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Increasing world trade Trade agreements and trade liberalisation are two essential components in the drive to increase the rate of growth of world trade. Trade agreements can involve two countries reducing tariffs on each other’s goods, or perhaps reducing bureaucracy by simplifying import/export procedures. Trade liberalisation might involve creating free-trade areas. This creates larger markets, greater access to raw materials, and more competition. The effect of both of these should be lower unit costs, lower prices and greater choice.. Growth of Regional Trade Agreements in the Global Economy The number of regional trade agreements (RTAs) across the global economy have grown. Some of these agreements are simply free-trade agreements which involve a reduction in current tariff and non-tariff import controls so as to liberalise trade in goods and services between countries. Others have led to greater integration of economies e.g. EU. Examples of regional trade agreements: The European Union (EU) – a customs union, a single market and now with a single currency The European Free Trade Association (EFTA) The North American Free Trade Agreement (NAFTA) – created in 2004 The Southern Common Market (MERCOSUR) The Association of Southeast Asian Nations (ASEAN) Free Trade Area (AFTA) The Common Market of Eastern and Southern Africa (COMESA) |