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International Trade and Economic Bloc Essay

The intention of this paper is to discuss about the advantages and disadvantages for Ecuador if it becomes a member of the Mercado Comјn del Sure (Numerous). Currently, the world is going through a change in important ways in the economy, the importance of belonging to an economic bloc is that through this you can get “mutual benefits in international trade” The Numerous as we know is a South American economic bloc that “is integrated by Argentina, the Federative Republic of Brazil, the Republic of Paraguay, the Oriental Republic of Uruguay and the Bolivian Republic f Venezuela” (Exhibit 1).

The countries that belong to the are differentiated by the alliance of values held and reflected in its democratic and pluralistic societies, the protection of human rights, the environment and sustainable development. NUMEROUS is also committed to strengthening democracy, eradicate poverty and strengthen the economic and social development of the members with equity. In recent years the President of Ecuador Icon. Rafael Chorea expressed his desire to become a member of this economic bloc, but what does it mean to Ecuador o Join to this organization?

This economic bloc offers attractive proposals for countries; among them is the establishment of a common external

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tariff, plus the free movement of goods and services between the member countries. For a developing country like Ecuador, it is difficult to make the decision of belonging to an economic bloc, as it must evaluate the economic factors that affect and the conditions under which it should enter to the block in order to benefit and expand its trade relations.

On the one hand, the fact that Ecuador entering to NUMEROUS brings many questions of why it should not belong to the bloc, the principal concern is especially the agricultural sector, as we know members of this organization are very similar when we talk about agricultural production, therefore there would be no an increase in exports of agricultural products.

For the this sector is more appropriate to have trade relations with countries that are not close and do not have a large agricultural production; countries such as North America and Europe, as the demand for agricultural products will increase, therefore the exports, which is good for the amounts economy. Business partners really interesting for our country are the major industrialized economies, they are so different to us so we can export them all we have and they do not, and we can take this as a competitive advantage.

For example, to Venezuela or Brazil would be impossible to export them bananas, coffee, cocoa or flowers because they produce them, while all of these products have a high demand in Canada, U. S. And Germany. As mentioned above a country before Joining to an economic bloc should consider the consequences that will have in the future, in this ease the Ecuadorian government’s main concern is “to know what are the conditions that will define Numerous for the admission. Currently under the Economic Complementation Agreement no. 9 signed between the Andean Community and NUMEROUS in 2004, is set to progressively strengthen a free trade area between the parties until 2018 (with exceptions). ” This is not convenient to the country. In addition of why Ecuador should not belongs to NUMEROUS is because of the application of a common external tariff that would reduce the productive sector and business in one of the main actors in the Ecuador GAP. On the other hand, if Ecuador becomes a member of NUMEROUS it brings many economic advantages regarding to the high economic deficit that we have with NUMEROUS (Exhibit 2); it could stabilize the trade balance.

In addition, the block has a mechanism called “Stabilization Fund” to improve the competitiveness of their smaller partners (Paraguay and Uruguay). To this advantage also the Ecuador could has access and by this way reduce the deficit. Belonging to a block with large economies such as Brazil is a great opportunity to continue the development; also if it commonly signs agreements between blocks we would have the opportunity to expand, offering our products to unexplored markets and thus increase exports.

President of Ecuador considers to be a Numerous membership is very favorable as it would be the only way out that they would have to the Pacific Coast, “We have different relationships with all members of Numerous and it would be highly beneficial for the block have a member with the Pacific coast, Chorea said,” of course it would be a benefit for the country as all the bloc’s exports to Asia would pass through the country, so we would eave more movement in port operations they must pay port charges for transit.

To conclude, for countries it is of great importance to achieve a common market, a free flow of goods and capital across the territory and also the formation of a political and administrative structure of supranational scope, ‘e it is above each of the member states. These agreements are not Just political-commercial venture, but also a working mechanism and cooperation in the areas of Justice, the environment, labor, education and the workplace and culture.

Regarding the need for a new enervation of policy interventions aimed at creating favorable conditions for the rural world, its capitalization and training for the best use of their abilities, in order to achieve the opportunities to improve their living conditions and work. Such policies should be designed and evaluated considering their efficiency to achieve searched impacts, this inescapable condition when defining the allocation of resources from national budgets, and when seeking agreements on regional trading desks, in harmony with trade and macroeconomic aspects of NUMEROUS.

Meanwhile, for an application more efficient use of resources, it requires institutional re-engineering within the country, which allows us to focus policies and, consequently, with programs and projects in support of poverty alleviation specific act without violating the agreements between countries. For Just name a few can be said that the real purpose of these treaties is to reduce greatly the rate of duty for greater acceleration in imports and exports of the member countries. In my opinion the development alternatives for underdeveloped countries is to seek its development within the same environment.

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