Regional Trading Blocs – Advantages

The advantages of having a Regional Trading Bloc are as follows −

●      Foreign Direct Investment − Foreign direct investment (FDI) surges in TRBs and it benefits the economies of participating nations.

●      Economies of Scale − The larger markets created results in lower costs due to mass manufacturing of products locally. These markets form economies of scale.

●      Competition − Trade blocs bring manufacturers from various economies, resulting in greater competition. The competition promotes efficiency within firms.

●      Trade Effects − As tariffs are removed, the cost of imports goes down. Demand changes and consumers become the king.

●      Market Efficiency − The increased consumption, the changes in demand, and a greater amount of products result in an efficient market.

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