Trade Preferential Arrangements or Regional Trade Agreements Essay

Trade Preferential Arrangements or Regional Trade Agreements - Essay Example 21). Though available, the preferences should not extend to all the trade activities between the two transacting countries. Also, the coverage of activities involved can largely depend on the type of agreements existing between the countries. Common forms of PTAs include the free trade areas. Most member countries involved in preferential trade agreements often belong to established geographical areas such as the North American Free Trade Area, European Union, Southern African Customs Union (SACU), and the Association of Southeast Asian Nations. The North American Free Trade Agreement is a common example of a free trade area that allows its member countries to enjoy free-trade opportunities. However, each of the countries is allowed to have its trade policies that apply to non-member countries that are involved in joint trading activities. The Southern African Customs Union (SACU) serves as an extension of the customs union arrangement. SACU member countries are allowed to conduct free trade, and an external trading policy is also applied to the non-member countries. SACU majorly covers South Africa, Lesotho, Botswana, and Swaziland. The European Union is an example of a full customs union that represents a common market. It allows for free movement of labor among its member countries. Lastly, the Association of Southeast Asian Nations consists of Malaysia, Indonesia, Singapore, Philippines, Thailand, Brunei, Vietnam, Burma, Laos, and Cambodia. The ASEAN community has a lot of influence on the trade, security, and political issues within the Asia-Pacific region (Bossche, 2008, p. 706). The North American Free trade Agreement gives precedence to the trading activities between Mexico, Canada, and the United States. The agreement allows for the elimination of relevant tariff as well as non-tariff barriers that are