Global Business Today Chapter 8

Front 1

Regional Economic Integration

Back 1

Agreements among countries in a geographic region to reduce, and ultimately remove, tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other.

Front 2

Free Trade Area

Back 2

A group of countries committed to removing all barriers to the free flow of goods and services between each other, but pursuing independent external trade policies.

Front 3

European Free Trade Association (EFTA)

Back 3

A free trade association including Norway, Iceland, Liechtenstein, and Switzerland.

Front 4

Customs Union

Back 4

A group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy.

Front 5

Common Market

Back 5

A group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other and (2) the pursuit of a common external trade policy.

Front 6

Economic Union

Back 6

A group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production; (2) the adoption of a common currency; (3) the harmonization of tax rates; and (4) the pursuit of a common external trade policy.

Front 7

Political Union

Back 7

A central political apparatus that coordinates economic, social, and foreign policy.

Front 8

Trade Creation

Back 8

Trade created due to regional economic integration; occurs when high-cost domestic producers are replaced by low-cost foreign producers in a free trade area.

Front 9

Trade Diversion

Back 9

Trade diverted due to regional economic integration; occurs when low-cost foreign suppliers outside a free trade area are replaced by higher cost foreign suppliers in a free trade area.

Front 10

European Union

Back 10

An economic group of 27 European nations; established as a customs union, it is moving toward economic union; formerly the European Community.

Front 11

Treaty of Rome

Back 11

The 1957 treaty that established the European Community.

Front 12

European Commission

Back 12

Body responsible for proposing EU legislation, implementing it, and monitoring compliance.

Front 13

European Council

Back 13

The ultimate controlling authority within the EU.

Front 14

European Parliament

Back 14

Elected EU body that consults on issues proposed by the European Commission.

Front 15

The Treaty of Lisbon

Back 15

Treaty signed in 2007 that made the European Parliament the co-equal legislator for almost all European laws and also created the position of the president of the European Council.

Front 16

Court of Justice

Back 16

Supreme appeals court for EU law.

Front 17

Single European Act

Back 17

A 1987 act, adopted by members of the European Community, that committed member countries to establishing an economic union.

Front 18

Maastricht Treaty

Back 18

Treaty agreed to in 1991, but not ratified until January 1, 1994, that committed the 12 member states of the European Community to adopt a common currency.

Front 19

Optimal Currency Area

Back 19

One where similarities in the underlying structure of economic activity make it feasible to adopt a single currency.

Front 20

North American Free Trade Agreement (NAFTA)

Back 20

Free trade area between Canada, Mexico, and the United States.

Front 21

Andean Pact

Back 21

A 1969 agreement between Bolivia, Chile, Ecuador, Columbia, and Peru to establish a customs union.

Front 22

Mercosur

Back 22

Pact between Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area.

Front 23

Central American Common Market

Back 23

A trade pact between Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, which began in the early 1960's but collapsed in 1969 due to war.

Front 24

Central America Free Trade Agreement (CAFTA)

Back 24

The agreement of the member states of the Central American Common Market Joined by the Dominican Republic to trade freely with the United States.

Front 25

CARICOM

Back 25

An association of English-speaking Caribbean states that are attempting to establish a customs union.

Front 26

Caribbean Single Market and Economy (CSME)

Back 26

Unites six CARICOM members in agreeing to lower trade barriers and harmonize macroeconomic and monetary policies.

Front 27

Association of Southeast Asian Nations (ASEAN)

Back 27

An attempt to establish a free trade area between Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam.

Front 28

Asia-Pacific Economic Cooperation (APEC)

Back 28

Made up of 21 member states whose goal is to increase multilateral cooperation in view of the economic rise of the Pacific nations.