based on an answer submitted on Quora
There are many regional trading alliances in the history of the world. They are too numerous to list, particularly if you go back for centuries. One of the earliest that was hugely influential for the development of northern Europe was the Hanseatic League of mostly German city-states what dominated North and Baltic Sea trade from the 12th through the 15th centuries, then gradually declined until its demise in the 17th century. Scores of largely merchant-governed city-states banded together to enforce common laws of trade, suppress piracy and privateering by neighboring kingdoms, and maintain their own independence in the face of encroachments from monarchical states and rival merchants. Some Dutch, Flemish and Swedish towns also joined. The League had trading agreements with others, including the King of England for a time and the rich Flemish woolen manufacturing and trading towns such as Bruges, Ghent and Antwerp. The Hanseatic League was loosely governed by various councils.
Various powerful Italian trading city-states during the medieval period sometimes competed with each other and sometimes also formed leagues, typically organized by a single dominant city, but sometimes as an alliance involving more than one.
The nation of the Netherlands started out as a trading alliance of seven provinces, Holland being the richest, that gradually evolved into a single nation, rather similar to the European Union more recently.
Switzerland had a similar history as numbers of independent city-states, called cantons, gradually coalesced for mutual defense and commercial benefit.
The founders of the United States of America studied all these examples, because they too started out as 13 independent states who leagued together to gain independence from Britain and did not really form a united nation until the Constitution was adopted to unite them under a more powerful federal government. If you read the Federalist Papers, for example, about the reasons for the Constitution, creating a common trading union is one of the central reasons
Trading agreements or alliances between countries are so numerous, but one very important one that started the trend toward freer trade in Europe during the 19th century was initiated by the Cobden-Chevalier Treaty of 1860 between Britain and France. It was particularly important for establishing the “Most Favored Nation” (MFN) clause subsequently common in many subsequent trade agreements and later of the GATT and WTO. MFN means that any bilateral trade concessions you made to any country automatically also apply to every country that you have MFN status with. This creates a sort of broader trading alliance.
For example, suppose Britain agrees with Portugal to eliminate its tariff on Portuguese wine. If Britain had trade treaties including the MFN clause with Germany and France, then they would automatically get the same free access to the British wine market as a result of Britain’s concession to Portugal. Thus as trade treaties multiplied, there as a cascading effect toward freer and freer trade. However, that began to reverse again late in the century, as tariffs started to go up again, reaching their peak during the Great Depression of the 1930s, when world trade virtually collapsed.
Some trading alliances are between states, but others are between private companies in different countries. These include numerous international cartel agreements designed to fix prices and market shares among companies in the same industry. They sometimes have the backing of their home state governments, but not necessarily. There are also very influential international agreements between big banks, like the China Consortium of 1908–1939, the Ottoman Finance Board, and many others that dictated the conditions on which governments could obtain loans from private foreign banks. These certainly affected trade, but I will leave them aside, since they are not, strictly speaking, regional trading alliances.
One very important trading alliance that was also a private cartel the Red Line Agreement of 1928, which divided the oil resources of the Middle East among companies in the USA, Britain and France. This was a victory for American oil companies over the French- and British-mandated governments in Syria, Iraq, etc., that wanted to favor companies from their own home nations. USA’s giant Standard Oil trust and allied American companies were able to bully their way into the cartel because of their global marketing power and cheap East Texas crude that might otherwise undermine the global cartel price.
There were numerous other significant international cartels during the interwar period in various industries, but one of the most significant, if temporary at the time, was an steel, iron and coal cartel agreement among German, French and British steel and coal companies in 1939. It was soon interrupted by World War II, but then revived again after the war as the European Coal and Steel Community, which became the foundation for the European Common Market and then eventually the European Union, which remains the world’s largest regional trading alliance.
Today, probably the second most significant trading alliance is the North American Free Trade Agreement of 1994. It started with the 1988 Canada-US Free Trade agreement, but when Mexico joined it was rebranded as NAFTA.
Another very important regional trade alliance today is the ASEAN Free Trade Area, formed by 6 members of the Association of Southeast Asian Nations in 1992. It was soon expanded to 10 members. This group was recently joined by four more nations in a less deep by very large alliance, the Regional Comprehensive Economic Partnership (RCEP). Its non-ASEAN members include China, Japan, Australia and New Zealand. RCEP overlaps with another major agreement of Asia-Pacific countries, which started as the Trans-Pacific Partnership (TPP) with 12 members (including Japan but not China), but when former President Trump pulled out of it as one of his first acts as president, the other 11 members went forward with the Comprehensive Progressive Agreement for Trans-Pacific Partnership (CPTPP). The USA is now the only major country bordering on the Asia-Pacific region that is not in any of these agreements currently.
There are also regional trading alliances among many of the states of the former Soviet Union, in Africa, and in Latin America, but none of these are as large as the ones I have mentioned in terms of total volume of trade, so I will not list them all. Most countries in the world are in one or more regional trading alliance.
The conditions of trade globally have always been highly organized by both governmental and private business agreements. Some of these tend to free trade from restrictions, such as tariffs, but others tend more to regulate trade, such as cartels. Cartels tend to restrict production and raise prices, whereas lowering tariffs lowers prices and tends to expand production globally. Many modern trade agreements are a mix of these two tendencies, since they often include enforcement of so-called “intellectual property rights,” which are legal monopoly powers granted to trademarks, patents, copyrights, and trade secrets. These are also often the basis for cartel agreements, such as patent sharing agreements.