A free trade zone formed by some countries through an agreement on taxes, customs duty and trade, can be called a trade bloc.
Many trade blocs are operating globally at present.
The following are some examples for trade blocs.
• European Union
• ASEAN (Association of South East Asian Nations)
• SAARC (South Asian Association for Regional Co-operation)
• NAFTA (North American Free Trade Agreement)
Various factors act against the upliftment of foreign trade.
The following are major factors among them.
• Natural barriers
Eg: Language differences
Cultural differences
• Artificial barriers
Eg: Customs duty
Import quotas
Import bans
Exchange controls
Customs rules and regulations

Nations have formed various organizations to minimize the unfavorable impact of these
barriers on foreign trade and to uplift it.
The following are some examples of those organizations.
• World Trade Organization (WTO)
• International Bank for Rehabilitation and Development – World Bank (IBRD)
• International Monetary Fund (IMF)
• G8 Group.
A trade agreement can be simply explained as a compact between two or more
countries to exchange commodities during a certain period.
• When two countries sign an agreement and exchange a certain amount of commodities
during a certain period, they are called Bilateral Trade Agreements and when more than
two countries get together and agree to exchange commodities, they are called Multi
lateral Trade Agreements.
• There are advantages of trade agreements such as getting a fixed market, protection
from price fluctuations and development of international co-operation.
• At present, several countries get into agreements in order to take necessary action to
protect their economies.
Presently, some new trends can be seen in foreign trade and the following are some of them.
• Expansion of foreign trade through e-commerce.
• Use of electronic payment methods.
• Establishment of trade blocs and trade partnerships.