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13 Cards in this Set
- Front
- Back
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Concerns of Regional Integration
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Too much diversion, too little creation
May take precedence over multilateralism (the WTO) |
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Advantages of Regional Integration
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Fewer countries, easier, more flexible
Locks in trade liberalism Tackles issues not covered by WTO |
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WTO
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seeks to establish trade policy rules that help expand trade and improve world living standards. It does this through:
- Administering Trade Agreements. - Serving As The Forum For Trade Negotiations. - Settling Trade Disputes. - Reviewing National Trade Policies. - Assisting Developing Nations On Trade Policy Issues. - Cooperating With Other International Organizations |
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WTO Today
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In January of 2009, the WTO had 153 members accounting for over 95% of world trade.
27 applicants are negotiating to become members. Russia is not yet a member, neither is the Bahamas. China is a member, so are Vietnam and Cuba |
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Types of Regional Economic Integration
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Free trade area:
= no internal tariff Customs union: = common external tariffs Common market = factor mobility allowed Economic union: = common monetary and fiscal policies Political union: = common political institutions |
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Effects of Regional Integration
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a number of political, social, and economic effects:
- With trade creation, resources shift from the least- to the most-efficient producers - With trade diversion, discrimination against outside producers diverts trade to less-efficient producers within the country or group - One dynamic effect of integration is ability of companies achieve economies of scale - Efficiency increases because of competition |
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NAFTA
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Three countries: US, Canada and Mexico
445 million people Special NAFTA Provisions - Duty-free market access (goods, services) - Worker’s rights (child labor, min. wages, health) - The environment - Rules on trade in services and investment - Protection of intellectual property - Dispute settlement mechanism. |
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The European Union
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History originates with the Marshall Plan (EEOC after WWII, EEC in 1957, EC in 1980s, EU in 1995)
Began with 6 countries, and by 2007 had 27 countries. European Union is by far the most extreme example of economic integration we have seen to date |
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The EU's Organizational Structure
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European Commission
- initiates proposals for legislation - guards the treaties - manages and executes Union policies The European Parliament - has legislative power - power over the budget - supervision of the executive decision Council of the European Union in cooperation with Parliament, has final say over legislation The Court of Justice of the European Communities |
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The Treaty of Maastricht (1995)
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called for establishing European economic, monetary (EMU), and political union
political union involves Common European citizenship Joint foreign, defense, immigration, and policing policies Harmonization of social policy on workers’ issues Some countries (i.e. France & Germany) want closer European integration. Others (i.e. U.K. & Denmark) want less centralized control |
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Problems with a single European Market (like EU)
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Internal concerns about EU
The potential growth of centralization and socialism Lack of acceptance of key changes, such as tax harmonization The possible shift of jobs from northern to southern Europe The elimination of small and medium-sized companies External concern of “Fortress Europe” |
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Latin America Integration
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Latin America needs economic cooperation to enlarge its market size
Major Latin American Regional Groups Andean Pact MERCOSUR Argentina, Brazil, Paraguay, Uruguay The major trade bloc in South America Customs Union Linkage across Groups Summit for the Americas—goal to link together trading groups in the Americas |
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Other Integration Efforts
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The member countries of ASEAN—Brunei, Indonesia, Malaysia, Philippines, Laos, Cambodia, Singapore, Thailand, Myanmar and Vietnam have wide disparities in population and economic strength
APEC comprises 18 countries that account for half of world output—including the United States, China, and Japan The UN, IMF, WTO, UNCTAD all work towards reduction of tariffs and economic integration |
