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Multinational Market
Regions and Market Groups
Multinational Market
Regions and Market Groups
I.
Patterns of Multinational Cooperation
1) Regional Cooperation Groups
2) Free Trade Area
3) Customs Union
4) Common Market
5) Political Union
The European Economic Area:
EU, EFTA, and Associates
ICELAND
E
U
EFTA
EC Associated
ATLANTIC
OCEAN
NORWAY
FINLAND
Netherlands
DENMARK
UNITED
IRELAND
BELGIUM
KINGDOM
GERMANY
FRANCE Switz.
Austria
ITALY
Portugal
SPAIN
TURKEY
MALTA
GREECE
II.
Europe
1) European Union
a) Implications for European Firms
- Lower transaction/transport costs
- Economies of Scale in production
- Gains from competition
b) Free Expansion to Other European
Markets
- Access to > 370 million consumers
- Flexible production
- Harmonization of laws/standards
A Comparison of the EU and NAFTA
Population
($ millions)*
10-7
GNP
(per capita)*
Imports**
($ millions)
Exports**
($ millions)
EU*
373.5
$ 8,180
1,899,466
1,927,914
NAFTA
387.4
8,061
1,014,211
852,536
* Includes 15 Countries.
**Includes intra-member trade.
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SOURCES: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August
27, 1997; and International Marketing Data and Statistics, 1997 (London: Euromonitor,
1997).
c) European Union Implications for U.S. Firms
- Easier access to European markets
- Potential growth in demand for U.S. products
- Increased competition
- Fears of “Fortress Europe”
Marketing Mix Implications of EU
2) EFTA
3) CEFTA
EC Institutions
European Commission
Council of Ministries
European Parliament
European Court of Justice
Commonwealth of Independent States
ARCTIC OCEAN
BELARUS
MOLDOVA
10-10
UKRAINE
RUSSIAN REPUBLIC
GEORGIA
ARMENIA
AZERBAIJAN
KAZAKHSTAN
UZBEKISTAN
TURKMENISTAN
KYRGYZSTAN
TAJIKISTAN
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Twelve republics, each with their own
legislatures
Twenty smaller “autonomous republic”
or homelands for various ethnic groups
Central European Free-Trade Area
(CEFTA)

Poland

Hungary

Slovakia

Czech Republic

Slovenia

Romania
10-11
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North American Free-Trade Area
(NAFTA)
10-12
Canada
United States
Mexico
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North American Free-Trade Area
Provisions
10-13

Market Access

Non Tariff Barriers

Rules of Origin

Customs Administration

Investment

Services

Intellectual Property

Standards

Government Procurement
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NAFTA Rules of Origin
Rule Type
Description
Tariff shift rule
Non-NAFTA imports undergo
sufficient manufacture or
processing to become products
that can qualify under a different
tariff classification.
Value-content rule
A set percentage of the value of
the good must be North American
(usually coupled with a tariff
classification shift requirement).
Some goods are subject to the
value-content rule only when they
fail to pass the tariff classification
test because of non-NAFTA inputs.
10-14
* A complete description of the rules of origin can be found at www.mac.doc.gov/nafta/menu1.htm
(select NAFTA Rules of Origin and Customs Information).
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Southern Cone Free Trade Area
(Mercosur)

Argentina

Bolivia

Brazil

Chile

Paraguay

Uruguay
10-15
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Latin American Integration Association
(LAIA)

Argentina

Mexico

Bolivia

Paraguay

Brazil

Peru

Chile

Uruguay

Columbia

Venezuela

Ecuador
10-16
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Andean Common Market (ANCOM)
Bolivia
10-17
Columbia
Ecuador
Peru
Venezuela
Panama (Assoc.)
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Caribbean Community and Common
Market (CARICOM)


10-18





Antigua
Barbuda
Belize
Dominica
Grenada
Guyana
Jamaica
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





Montserrat
St. Kitts-Nevis
Anguilla
St. Lucia
St. Vincent
Trinidad-Tobago
Central America Common Market
(CACM)
Guatemala
10-19
Costa Rica
Nicaragua
Honduras
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The Future
• NAFTA
10-20
• SAFTA ???
• FTAA ???
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Association of Southeast Asian Nations
(ASEAN)
10-21
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
Brunei

Philippines

Indonesia

Singapore

Laos

Thailand

Malaysia

Vietnam

Myanmar
ASEAN + 3
10-22
• Brunei
• Singapore
• Indonesia
• Thailand
• Laos
• Vietnam
• Malaysia

China
• Myanmar

Japan
• Philippines

South Korea
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Comparison of Exports Among Members
of APEC and the EC
Population, 1989
(millions)
APEC
10-23
Americas*
Asia
Oceania
EC
Exports, 1990
(U.S. $ millions)
Exports, 1995
(U.S. $ millions)
GNP, 1996
(U.S. $ billions)
2,235
732,869
770,097
22,952
406
306,486
311,085
7,989
1812
399,455
419,901
6,447
22
26,928
34,111
343
374
515,915
628,606
8,180
*includes: U.S., Canada, Mexico, and Chile.
Irwin/McGraw-Hill
SOURCES: IMF: International Financial Statistics, Direction of Trade; OECD:
National Account, EC Committee: “Indicators of Market Size for 115 Countries,”
Crossborder Monitor, August 27, 1997; and International Marketing Data and Statistics.
1997 (London: Euromonitor, 1997).
Economic Community of West African
States (ECOWAS)

10-24






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Benin
Burkina Faso
Cote d’ Ivoire
Gambia
Ghana
Guinea
Guinea-Bissau





Liberia
Mali
Mauritania
Niger
Nigeria
Southern African Development
Community (SADC)

Angola
Botswana
Lesotho
Namibia
Malawi
Mauritius

Mozambique


10-25



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




South Africa
Swaziland
Tanzania
Zambia
Zimbabwe
Afro-Malagasy Economic Union
10-26
▶ Benin
▶ Gabon
▶ Burkina Faso
▶ Mali
▶ Cameroon
▶ Mauritania
▶ Central African Republic
▶ Niger
▶ Chad
▶ Senegal
▶ People’s Repub. of the Congo
▶ Togo
▶ Cote d’Ivoire
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East African Customs Union
10-27
▶ Ethiopia
▶ Tanzania
▶ Kenya
▶ Uganda
▶ Sudan
▶ Zambia
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Maghreb Economic Community
▶ Algeria
▶ Tunisia
▶ Libya
▶ Morocco
10-28
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Economic Community of West African
States (ECOWAS)
10-29
▶ Benin
▶ Guinea-Bissau
▶ Burkina Faso
▶ Liberia
▶ Cote d’Ivoire
▶ Mali
▶ Gambia
▶ Mauritania
▶ Ghana
▶ Niger
▶ Guinea
▶ Nigeria
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West Africa Economic Community
● West Africa Economic Community
10-30
▶ Senegal
▶ Mali
▶ Togo
▶ Mauritania
▶ Burkina Faso
▶ Niger
▶ Cote d’Ivoire
● Customs and Economic Union of Central Africa (CEUCA)
▶ Cameroon
▶ P. Rep. Of Congo
▶ C. Africa Repub. ▶ Gabon
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Customs and Economic Union of
Central Africa (CEUCA)
▶ Cameroon
▶ P. Rep. Of Congo
10-31
▶ C. Africa Repub. ▶ Gabon
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Arab Common Market
Iraq
10-32
Kuwait
Jordan
Syria
Egypt
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Economic Cooperation Organization
(ECO)
Pakistan
10-33
Iran
Turkey
Azerbaijan
Turkmenistan
Uzbekistan
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Future Multinational Trade Groups

United States/Japan

Hong Kong/Taiwan/China

Asia-Pacific Rim Countries

Hong Kong/Taiwan/Coastal Provinces of Southern
China

Western Hemisphere Free Trade Area

Transatlantic Free Trade Area
(United States and European Union)
10-34
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