ABSTRACT
Regional trading blocs can be categorized at different levels according to how extensive the integration of national economies becomes. The first and easiest to negotiate is a free-trade area, under which tariffs and other barriers to trade among the members are removed (sometimes only for manufactured goods, owing to differing agricultural support programs). To the extent that each country retains its own antidumping procedures, national restrictions can still influence trade among members. Also, each country maintains its own tariff schedule and other commercial policies with regard to goods coming from nonmember countries. Such arrangements encourage the importation of goods into whichever member has the lowest tariffs and their subsequent reshipment to member countries with higher external tariffs. Certificates of origin are supposed to guarantee that products coming tariff-free from a member country really were produced there, but enforcing such a system effectively to prohibit transshipments is far from automatic.
