Transcript Regional Economic Integration - UAH

Free Trade Area
Regional
Economic
Integration
Customs Union
Common Market
Economic Union
Political Union
Major Regional Trading Groups
Free Trade Areas
European Free Trade
Association
Central European Free
Trade Agreement
North American Free
Trade Agreement
Association of South East
Asian Nations
Customs Union
MERCOSUR
Common Market
Caribbean Community and Common Market
Central American Common Market
Andean Group
Economic Integration
European Union
Benefits of Regional
Economic Integration
Drawbacks of Regional
Economic Integration
Integration in Europe
European
Coal and Steel
Community
European
Economic
Community
Single
European Act
Maastricht
Treaty
Structure of
the European Union
European
Council
European
Commission
Court
of Justice
Council
of Ministers
European
Parliament
United States - Canada
Free Trade Agreement
Integration in
North America
North American Free
Trade Agreement (NAFTA)
Latin American
Free Trade
Association (LAFTA)
Integration in
Latin America
The Andean
Community Pact
Latin American
Integration
Association (ALADI)
Southern
Common Market
(MERCOSUR)
Central America
and the Caribbean
Caribbean
Community
and the Common
Market (CARICOM)
Central
American
Common Market
(CACM)
Proposed Trade
Agreements
Free Trade
Transatlantic
Area of the
Economic
Americas (FTAA) Partnership (TEP)
Integration in Asia
Association
of Southeast
Asian Nations
(ASEAN)
Asia Pacific
Economic
Cooperation
(APEC)
Integration in the
Middle East and Africa
Gulf
Cooperation
Council (GCC)
Economic
Community of
West African
States (ECOWAS)
Video: Part III: Yahoo!, Rollerblade, Sebago
Shoes, and NIVEA
Qs:
• How could regional economic integration in Europe help a nonEU company such as Sebago Shoes succeed?
• Could companies such as Rollerblade, NIVEA, and Yahoo!
Succeed in regionally integrated economies such as the Middle
East and Africa? Why or why not?
• Certain groups of countries, particularly in Africa, are far less
economically developed than other regions such as Europe and
north America. What sort of integration arrangement do you
think developed countries could create with less developed
nations to improve living standards? Be as specific as you can.
General Agreement on Tariffs and Trade (GATT)
Created in 1947 by 23 countries
• Intended to negotiate reductions in trade restrictions
and develop common procedures for handling
imports and exports
• Efforts led to a number of multilateral reductions in
tariffs and nontariff barriers for member countries
– across-the-board reductions
– each country negotiated exceptions to its
reductions
• Codes of conduct developed in each of five areas
Inherent weakness of GATT
• Cumbersome negotiations
• Most-favored nation— trade concessions applied to
all trading partners
• No mechanism to assure compliance with negotiated
agreements
World Trade Organization (WTO)
Created in 1995 to replace GATT
Negotiating process
• Ongoing negotiations about
– restrictions on trade in services
– nontariff barriers to trade
– protection of intellectual-property rights
– investment policies that affect trade
Granting of normal trade relations
• Apply to WTO members
• Eliminates the free-rider complaint raised during GATT
negotiations
• Certain exceptions recognized
Settlement of disputes
• Clearly defined settlement mechanism
• Sanctions may be applied to countries not complying with
rulings
Dealing with Governmental Trade Influences
When faced with import competition, companies may
• Move production to a lower-cost country
• Concentrate on market niches in which there is less
international competition
• Effect internal adjustments
Companies may require assistance of government to limit
imports or open foreign markets
• Governments deny some requests for assistance
companies attitudes differ toward protectionism
• Companies likely to lose from protectionism
– those that depend heavily on trade
– those that have integrated production in different
global locations
• Companies likely to gain from protectionism have single
or multidomestic production facilities