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27 Cards in this Set
- Front
- Back
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Refers to the growing economic interdependence that results when countries within a geographic region form an alliance aimed at reducing barriers to trade and investment
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Regional economic integration
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Mutual advantages for cooperating nations within a common geography, history, culture, language, economics, and/or politics
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Premise
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Free trade that results from economic integration helps nations attain higher living standards by encouraging
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Specialization, lower prices, greater choices, increased productivity, and more efficient use of resources
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A geographic area that consists of two or more countries that agree to pursue economic integration by reducing tariffs and other restrictions to cross-border flow of products, services, capital, and, in more advanced stages, labor
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Economic Bloc
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What is an advantage of an economic bloc?
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Blocs involve a smaller number of countries and are much easier to negotiate than a system of worldwide free trade
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Blocs involve a smaller number of countries and are much easier to negotiate than a system of worldwide free trade
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Synergies
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a continuum, with economic interconnectedness progressing from a low level of integration—the free trade area— through higher levels to the most advanced form of integration—the political union
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Regional integration
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How many possible levels of regional integration are there?
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Five
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The simplest and most common arrangement, in which member countries agree to gradually eliminate formal barriers to trade in products and services within the bloc, while each member country maintains an independent international trade policy with countries outside the bloc. E.g., NAFTA
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Free trade area
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Similar to a free trade area except that the member states harmonize their trade policies toward nonmember countries -- common tariff and nontariff barriers on imports from nonmember countries. E.g., MERCOSUR (Argentina, Brazil, Paraguay, and Uruguay)
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Customs union
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Trade barriers are reduced or removed, common external barriers are established and products, services, and factors of production such as capital, labor, and technology are allowed to move freely among the member countries. Common trade policy with nonmember countries. E.g., the EU.
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Common market (single market)
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Member countries enjoy all the advantages of early stages, but also strive to have common fiscal and monetary policies- identical tax rates, fixed exchange rates, free convertibility of currencies and the free movement of capital.
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Economic union
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the EU has made great strides toward this. Thirteen EU countries have established a monetary union with a single currency, the euro
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Example of an economic union
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Perfect unification of all policies by a common organization
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submersion of all separate national institutions
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What is the leading economic union?
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European union?
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What are the five possible levels of regional integration?
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1. Free trade area
2. Customs union 3. Common market 4. Economic Union 5. Political Union |
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Tariffs and most nontariff barriers have been eliminated for trade in products and services, and rules of origin favor manufacturing that uses parts and other inputs produced in the EU.
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Market Access
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The EU removed barriers to the cross-national movement of production factors—labor, capital, and technology
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Common Market
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The member countries have largely eliminated customs procedures and regulations, which streamlines transportation and logistics within Europe
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Trade rules
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The EU is harmonizing technical standards, regulations, and enforcement procedures that relate to products, services, and commercial activities
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Standards harmoinzation
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the EU's main decision-making body. Makes decisions regarding economic policy, budgets, and foreign policy, and admission of new member countries
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The Council of the European Union
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represents the interests of the EU as a whole. Proposes legislation and is responsible for implementing the decisions of the Parliament and the Council
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European commision
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consists of elected representatives that hold joint sessions each month
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European parliament
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What are the 3 main functions of the european parliament?
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1. Form EU legislation,
2. Supervise EU institutions, and 3. Make decisions about the EU budget |
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interprets and enforces EU laws and settles legal disputes between member states
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European Court of justice
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has been long-standing fixture of the EU. CAP is a system of agricultural subsidies and programs that guarantees a minimum price to EU farmers and ranchers
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Common agricultural policy
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Why are the 4 reasons Nations Pursue Economic Integration?
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1. Expand market size
2. Achieve scale economies and enhanced productivity 3. Attract direct investment from outside the bloc 4. Acquire stronger defensive and political posture |
