A Research Proposal on Trading Blocs Today Essay Example

EU and ECOWAS and analyze how their formation affects their international business practices. The choice of these two blocs is because they represent the developed world (EU) and developing world (ECOWAS). Furthermore, the paper will explore domestic issues within each bloc and their impact on member countries, whether positive or negative.

The study will examine growth concerns and the current stage of countries, as well as whether forming trading blocs is appropriate.

STATEMENTS OF THE RESEARCH PROBLEM

When analyzing Trading Blocs in different regions, it is important to note that regionalism and globalization vary in terms of market size and area. Developing countries that are hesitant about free trade view regional trade blocs as a means of safeguarding themselves against a hostile global market.

The proliferation of regional trading blocs poses a concerning risk to the global prosperity supported by the multilateral trade system. While bilateral agreements can assist in trade facilitation, the extensive bureaucracy and red tape involved frequently dissuade companies from utilizing these benefits.

The economy could be negatively impacted if lower-cost producers are the ones that don't benefit from these agreements, as they are often determined by politics rather than economics.

The existence of various preferential agreements with their unique regulations and administrative stipulations creates a disorderly and complex situation, instead of the reliability expected from multilateralism. The proliferation of these agreements reduces the likelihood of producing the prosperity that their creators intend to achieve.

LITERATURE REVIEW

The search for literature on this subject reveals various edited volumes in recent years. Some emphasize institutional aspects, while others focus on theory. In my approach, I will generally use the interpretive

perspective and specifically refer to (Chase, 2008) and their focus on the situational approach. This approach is particularly useful as trade blocs are a current ongoing situation, and their work sheds light on the perspective and how to interpret it.

The interpretive perspective emphasizes the interpretation of meanings and perspectives regarding trading blocs and their impacts on member countries. On the other hand, the situational approach entails delving into specific interactions to gain deep understanding. This approach is suitable for investigating trading blocs that have been a subject of debate among scholars since the 1960s. Through the gravity model, investigations indicate the existence of three continental trading blocs which are the Americas, Europe, and Pacific Asia.

The inter-regional trade between countries cannot be solely explained by their proximity and economic factors such as size and GNP/capital, or shared language or border. Moving from the econometrics to the implications for economic welfare, Krugman has argued for and against a three-bloc world, depending on the presence or absence of transport costs. To provide a more realistic model, we consider a scenario where the intercontinental transportation costs are neither excessively high nor non-existent.

According to Frankel et al. (1993), trade liberalization within continental Free Trade Areas may harm welfare if transport costs are low, creating what is referred to as a "super-natural" bloc. Despite Article 24 of the GATT, partial liberalization is preferable to full liberalization within regional Preferential Trading Arrangements. The super-natural zone arises when regional trade policy goes beyond what is warranted by natural factors.

The Journal of Economic Integration published an article in 1997 asserting that removing trade barriers generally benefits global welfare. However, the concept

of forming trading blocs based on "natural" lines may not always be as advantageous as creating "unnatural" blocs under certain circumstances, which renders the notion flawed. To evaluate their impact on international commerce and draw conclusions using factual examples, this study will scrutinize treaty agreement reports from both EU and ECOWAS blocs. Although the European Union is a significant example of regional integration, similar experiments are taking place worldwide.

According to McCormick (2008), progress levels regarding regional groupings' ambition and integrative potential have not been consistent. Furthermore, I intend to investigate the prevalence of trading blocs by examining their origin and history. McCormick (2008) acknowledges that trading blocs have gained popularity in the last two decades, which has resulted in an increase in global regional integration initiatives. The idea of voluntary regional integration dates back to the 19th century.

In 1882, Prussia initiated a customs union with Hesse-Darmstadt. Other custom unions prospered throughout Europe, and certain states eventually achieved both political and economic unions.

The course will cover in-depth analysis of various scholars' works. For example, Professor Adebayo's presentation at the African Development Forum's third meeting included an explanation of five phases of Africa's integration process and its impact on ECOWAS. Additionally, Walter Mattli's publication, The Logic of Regional Integration: Europe and Beyond, covers not only the activities in the EURO zone but also other parts of the world.

METHODOLOGY

Qualitative research is utilized to comprehend individuals' emotions and reasons behind their feelings. This method focuses on obtaining thorough information by asking questions such as "why do you say that?". It typically involves smaller sample sizes as opposed to quantitative projects, which

require much larger samples.

The collection and examination of data that can be presented numerically is referred to as quantitative research. This kind of research includes measurable data such as financial, demographic, or statistical results. For the examination of the development and history of trading blocs, this approach is appropriate because it allows the analysis of the bloc's timeline of activities, its impact on the bloc, when it's prepared to advance to the next stage of integration, and the positive and negative effects on international trade in the region.

The objective is to evaluate the impact of blocs on trade by examining the timeline of imports and exports in different regions.

Although my main focus will be on the secondary aspect of data gathering, I will still rely on this means for collecting information.