Motives DB

Running Head : REGIONAL TRADE BLOCS

Regional Trade Blocs

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At the onset of the formation of regional trading blocs , development theories are mainly to be accounted for the inspiration it brought as it tried to gain the attention of developing countries (Grimwade , 1996 Primarily , the assumption is that developing countries could promote their own local industries through constructing safety nets from the imports of developed countries and increasing the trade among the members of

the regional trade blocs (Grimwade , 1996 . However , as practice has shown , it remains that this is not the case and that small industries are placed at greater risk as a government joins in regional trading blocs . This subsequently leads the government to provide safety nets for these small domestic industries in to avoid losing it altogether

As formed into being by Alexander Hamilton , the infant industry argument shows that the government has to take care of its infant industries ' from threats to its growth until the time where it is able to compete with the large industries (Aswathappa , 2006 . Means through which the government could support these infant industries is through the provision of incentives and subsidies (Aswathappa , 2006 . Moreover import subsidies could be implemented for the products coming from the developing countries while making use of the products at home that can serve as an alternative

Through the safety nets that are provided by the government...