Trading Associations are centuries old dating back to the period in history where guilds were created to benefit all members and protect their trading activities and agreements. Our present day trading associations fall in to two easily recognizable groupings i.e. (a) Government- created trade associations such as (1) Politico-Military Associations formed for the purpose of mutual defense and the protection of trade routes and security of foreign investments such as North Atlantic Treaty Organization (NATO) .(2) Commercial Associations formed by many countries with the objective of utilizing agreements between participating governments to reduce trade barriers such as custom duties. Examples of this type of government created trade association are the European Common Market,the Latin American Free Trade Association and the Economic Commission for West African States (ECOWAS).
(b) The second category of Trading Association are Privately Created by private agreements between individuals or companies either inter-country or intracountry with the aim of creating some trade barriers for their mutual benefits such as cartels, price fixing and market segregation agreements of the Commonwealths of former British colonies and French colonies,European Free Trade Association (IAFTA) etc.
In both groups i.e., Government created association and privately created associations, one can quickly recognize that while trade is improved within the associations membership, it is at the exclusion and expense of trading outside the association .The contrasting objectives of these associations increase the complexity of relationships in the international market place.The complexity is amplified by the variations of the more common trade associations.
