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International Economic Course: Day 5: Economic Integration - EU - Aec - Nafta - Apec - Wto
International Economic Course: Day 5: Economic Integration - EU - Aec - Nafta - Apec - Wto
Agenda
Overview
– Economic Integration : overview,
theory
– Examples of PTAs: NAFTA, European Union
– WTO
– ASEAN, AEC,
– Recent topics: TPP, BREXIT
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Gain from Trade
Assignment:
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Economic Integration
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Economic Integration
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Economic Integration
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Economic Integration
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RCEP
RCEP
– “Regional Comprehensive Economic Partnership”
– Large FTA negotiated since 2013 by
ASEAN 10 countries plus 5: China, Japan, South Korea,
Australia and New Zealand
India also, until it recently dropped out
– Signed Nov 15, 2020
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Class 20: FTAs and Other Trade Deals 11
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Questions on Economist,
“Big Deal…”
• When was RCEP signed, by whom, and
after how many years of negotiation?
• By when is it expected to be ratified?
• In what ways is RCEP weaker than other
agreements?
• Of the trade of these countries, how much
will be newly covered by a trade
agreement? Why?
Class 20: FTAs and Other Trade 13
Deals
CPTPP
• CPTPP
– “Comprehensive and Progressive Trans-
Pacific Partnership”
– Successor to TPP after Trump/US pulled out
– Includes 11 countries, including
• Japan
• Canada
• Mexico
• Australia
• Chile
Class 20: FTAs and Other Trade 14
Deals
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Class 20: FTAs and Other Trade Deals 15
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Vietnam: International Economic
Integration
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• Once a US trade
embargo lifted in 1994,
Vietnamese citizens saw
the return of the soda
brand within the year,
around three decades
after it had been pulled
from the market due to
the Vietnam War.
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Economic Integration
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Economic Integration
Economic Integration
– Process of eliminating restrictions on
international trade, payments, and
factor mobility
– Results in the uniting of two or more
national economies in a regional trading
arrangement
Thus boosting the free movement of trade,
investment, and services across national boundaries
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Economic Integration
– Global (Multi-lateral)
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Some Types of International Economic
Institutions… with Examples …
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What is Economic Integration ?
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Economic Integration
Economic What are PTAs?
A Preferential Trading Arrangement (PTA) is a trade
policy that favors one country over another
– Most obvious cases: Charge a lower, or zero, tariff on
imports from one country while charging a higher tariff on
imports from another
– Also called a Regional Trade Agreement (RTA – the
term used by the Gerber textbook and by the WTO, or
FTAs) when a group of countries in a region do this with each
other
Term is used even when the countries are not near each other
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Trading blocs
A trading bloc is an agreement among countries to work
toward eliminating trade barriers. Trading blocs may be
regional (e.g., NAFTA, EU), yet there are different degrees of
integration possible.
• Coordination of economic
Economic union
policies among members
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Economic Integration
+ Unification of + Political
+ Form a monetary and unification,
common + Free fiscal policies, formation of a
+ Eliminate tariff on movemen harmonisation single nation
tariffs & other imports t of of tax rates
restrictions against factors
amongst non-
Political
member Common
Economic Union
members
countries Market Union
Customs
Free Union MERCOSUR East & West
Trade
Area
AEC Germany
NAFTA BENELUX
CARICOM
AFTA EU
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Economic Integration
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1. Increased competition
Lowers prices and increases quantity
2. Cost of production declines
Easier access to natural resources and technology
3. Increased access to technology and knowledge
4. Increased specialization
5. Greater opportunity for economies of scale
6. Increased employment
7. Increased income
8. Increased interdependence among members
Less chance of conflicts
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Economic Integration: Types of Regional
Trading Agreements
Canada
United States
Mexico
Venezuela
Colombia
Peru
Brazil
NAFTA (3)
CARICOM (13)
CACM (5)
Argentina
ANDEAN (5)
MERCOSUR (4)
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Thị trường chung Nam Mỹ Mercosur: 6 thành viên
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WTO
Australia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1983 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Bangladesh 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Brazil 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Brunei Darussalam
0 0 0 0 0 1992 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1992 0 0 0 0 1992 0 0 0 0 0 1992 0 0 0 0 0 0 1992 0 0 0 0 0 0 0 1992 0 0 0 0 0 0 1992
Bulgaria 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Burkina Faso 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Canada 0 0 0 0 0 1997 0 0 0 0 0 0 1997 0 1994 0 0 0 0 0 0 0 0 0 0 0 0 1989 0
China 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Colombia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1995 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Czech Republic 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Ecuador 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Hong Kong 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Hungary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
India 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Israel 0 0 2000 0 2000 0 0 0 1997 0 0 0 2000 0 0 2000 2000 2000 2000 0 0 0 2000 0 2000 0 0 0 0 0 0 2000 0 0 1993 0 0 0 2000 0 0 0 0 0 2000 2000 1993 0 0 0 0 0 2000 0 0 0
Japan 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Mexico 0 2000 0 2000 0 0 1994 1999 0 1995 2000 0 0 2000 2000 2000 2000 0 0 0 2000 0 2000 0 0 0 0 2000 0 0 0 0 2000 0 0 0 0 2000 2000 0 0 0 0 0 0 2000 1994 0
Morocco 0 0 2000 0 2000 0 0 0 0 0 0 0 2000 0 1998 2000 2000 2000 2000 0 0 0 2000 0 2000 0 0 1998 0 0 0 2000 0 0 0 0 0 0 2000 1998 0 1998 0 0 2000 2000 0 0 0 0 0 1998 2000 0 0 0
Nigeria 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Norway 0 0 1995 0 1973 0 0 0 0 1973 0 1995 1973 1973 1981 0 0 1973 1993 1973 0 0 0 0 0 0 1973 0 0 0 0 0 1986 0 0 0 0 0 1986 1973 0 0 0 0 0 1973 0 0 0
Pakistan 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Peru 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Poland 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Romania 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Russia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Slovakia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Slovenia 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
South Africa 0 0 2000 0 2000 0 0 0 0 0 0 0 2000 0 0 2000 2000 2000 2000 0 0 0 2000 0 2000 0 0 0 0 0 0 2000 0 0 0 0 0 0 2000 0 0 0 0 0 2000 2000 0 0 0 0 0 0 2000 0 0 0
Switzerland 0 0 1995 0 1973 0 0 0 1973 0 1995 1973 1973 1981 0 0 1973 1993 1973 0 0 0 0 0 0 1973 0 0 0 0 1986 0 0 0 0 0 1986 1973 0 0 0 0 0 0 1973 0 0 0
Taipei 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Turkey 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Ukraine 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
United States 0
Class 0: Introduction & Overview 42
0 0 0 0 0 0 0 1989 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1994 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Venezuela 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
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Custom Union
– Agreement among two or more trading partners
– To remove all tariff and nontariff trade
barriers between themselves
– Each member nation imposes identical trade
restrictions against nonparticipants
– Ex: EU- Turkey Custom Union
– Belgium, the Netherlands, and Luxembourg
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Economic Integration: Types of Regional
Trading Agreements
Common Market
– Group of trading nations
– Free movement of goods and services among
member nations
– Initiation of common external trade restrictions
against nonmembers
– Free movement of factors of production across
national borders within the economic bloc
– European Union (EU), 1992
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Economic Union:
– National, social, taxation, and fiscal
policies are harmonized and
administered by a supranational
institution
–Requires an agreement to transfer
economic sovereignty to a
supranational authority
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Economic Integration: Types of Regional
Trading Agreements
Monetary Union:
– Ultimate degree of economic union
– Unification of national monetary policies
– Acceptance of a common currency administered by a
supranational monetary authority
The United States - Monetary union
– Fifty states with a common currency
– Federal Reserve
Single central bank for the nation
– Free trade among the states
– Labor and capital move freely
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Regional Economic Integration (review)
Partial Trade
– Free trade in “select “industries
Free Trade Area (FTA):
– No internal tariffs at all
Customs union:
– … & … common external tariffs
Common market:
– … & … Factor (labor, capital, technology) mobility
Economic union:
– … & … Common currency
Political union:
– … & … Political integration
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Effects of a Regional Trading
Arrangement
Static effects of economic integration
– On productive efficiency
– And consumer welfare
Dynamic effects of economic
integration
– Relate to long-term rates of growth
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Static Effects of Economic Integration
Economic effects:
✓ Increased specialisation due to concentration on comparative advantages;
✓ Economies of scale due to enlarged market;
✓ Enhanced efficiency of resource allocation due to increased
competition; consumer benefits;
✓ Technology transfer, innovation and learning effects;
✓ Option to reap higher levels of FDI.
➢ Political motivations: Advanced relevance in bi- and multilateral trade
negotiations, increased economic and political reputation since trade
reforms are “locked-in”; increased security and stability in the region
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Dynamic effects of regional integration
schemes (cont.)
Lock-in reforms: use of an RTA to send a signal to private and
public agents that there will be no recidivism (=helps to lock in
reforms as in the case of WTO accession).
This MAY uncertainty and investment, in particular foreign
direct investment, as in the case of Mexico:
12.000
Launch of
NAFTA 10.000
negotiations 8.000
6.000
NAFTA put 4.000
into force
2.000
0
1985 1987 1989 1991 1993 1995
APEC (FTAAP)
Hong Kong, PNG, Russia,
Chinese Taipei
RCEP
TPP
China,
Korea Chile
India Australia
Japan, NZ Peru
ASEAN NAFTA
Canada
Brunei Mexico
Cambodia Indonesia Malaysia U.S.
Laos Philippines Singapore
Myanmar Thailand Vietnam
Note: Countries in red are those with which Korea has signed an FTA.
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Examples of PTAs
• Mercosur
– Customs union in South America
– Includes Brazil, Argentina, Paraguay,
Uruguay, Venezuela
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NAFTA - History
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Economic Integration: NAFTA
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Economic Integration: NAFTA
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Economic Integration: NAFTA
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Economic Integration: Effects of PTAs
Reasons
– Trade creation is much like true free trade
At zero tariff, import from partner only if
its cost is lower
Thus resources are used more efficiently
– Trade diversion is not like true free trade
What was imported from 3rd country, not
partner, when both paid the same tariff, must
have cost more in the partner than in the 3rd
country
Switching to the partner is a switch to a higher
cost source for the good
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Question & Answer: Take aways
Reflective Questions:
❑ What are the benefits of FTAs in the context of
Economic Integration ?
❑ Give some examples of static and dynamic effects of
economic integration ?
Is the US – South Korea free trade agreement good for
Americans ? Give your explanations in terms of benefits
vs. cost , jobs
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The European Union (EU)
EU = European Union
Group of 28 countries, among which there is free
flow of
– Goods
– Capital
– Labor (but not yet including those who joined most recently)
– Harmonization of laws and regulations
– Price transparency
– No customs at national borders
1951 European Coal and Steel France, Germany, Italy, Luxembourg, Netherlands
Community/Treaty of Paris
1958 European Economic
Community/Treaty of Rome
1973 Enlargement Denmark, Ireland, United Kingdom
1981 Enlargement Greece
1986 Enlargement Portugal, Spain
1992 European Union/Maastricht Treaty
1995 Enlargement Austria, Finland, Sweden
1999 European Monetary Union United Kingdom, Sweden and Denmark not included
2002 Common EMU currency: the euro United Kingdom, Sweden and Denmark not included
2004 Enlargement Cyprus, Czech Republic, Estonia, Hungary
Latvia, Lithuania, Malta, Poland, Slovakia, Slovenia
2007 Enlargement Bulgaria, Romania
2007 EU Constitution/Lisbon Treaty
2013 Enlargement Croatia
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Founders
Winston Churchill
The EU symbols
The motto:
United in diversity The European anthem
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24 official languages
Wealth
Area Population
Country (gross domestic
(x 1000 km²) (millions)
product per person)
Bosnia and
51 3.8 7 800
Herzegovina
Kosovo under UN
Security Resolution 11 1.8 :
1244
The 28 EU countries
4 272 508.2 27 400
together
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The treaties – basis for democratic cooperation built on law
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Croatia 2013
80
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Organization of EU
European Council
– Heads of State & President of European Commission
– Resolves major policy issues & sets direction – 2x year
European Commission – Brussels, Belgium
– Proposing, implementing & monitoring compliance - EU laws
– Commissioners appointed by each country – 5 year renewable terms
– Competition Commissioner regulator of competition and M&A
Council of the European Union
– Ultimate controlling authority – approves proposed laws
– 1 representative from each state – varies with topic
– Use majority voting rules rather than unanimous agreement
European Parliament – Strasbourg, France
– Directly elected by population – 732 members
– Debates legislation – Consultative body
Court of Justice
– Supreme appeals court for EU law
– 1 judge from each state – required to act as independent officials
European
Union
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France 633
Γερμανία 81.2
Spain 506
Γαλλία 66.4
Sweden 439
Ηνωμ Βασίλειο 64.8
Germany 357
Ιταλία 60.8
Finland 338
Ισπανία 46.5
Poland 313
Πολωνία 38
Italy 302
Ρουμανία 19.8
United Kingdom 249
Κάτω Χώρες 16.9
Romania 238
Βέλγιο 11.3
Greece 132
Ελλάδα 10.8
Bulgaria 111
Τσεχία 10.5
Hungary 93
Πορτογαλία 10.4
Portugal 92
Ουγγαρία 9.8
Croatia 88
How big are the EU countries?
Σουηδία 9.7
Austria 84
Αυστρία 8.6
4.6 Slovakia 49
Ιρλανδία
Surface area (x 1000 km²)
Λετονία 2 Belgium 31
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Economic Integration: European Union
European Union - monetary union
– The Maastricht Treaty, 1991
Full-fledged European Monetary Union (EMU) by 2003
Single currency, the euro
– The euro - official currency of 16 of the 27 member states of the
European Union
– The eurozone:
Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland,
Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia,
and Spain
– Also used in another five European countries
– Used daily by some 327 million Europeans
– Over 175 million people worldwide
Use currencies that are pegged to the euro
– The second largest reserve currency
– The second most traded currency in the world
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The single market: freedom of choice
Four freedoms of
movement:
• goods
• services
• people
• capital
The single market has led to:
Free to move
‘Schengen’
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Going abroad to learn
Erasmus+
Every year, more than 400
000 young people study or
pursue personal development
in other European countries
with the support of the EU’s
Erasmus+ programme for
education, training,
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An area of freedom, security and justice
Opponents expected:
– Division of the EU
– Loss of sovereignty
– Little popular support
– Regulatory & other costs
– Difficulties of adjustment to asymmetric shocks
(As had happened before, e.g., with German
unification and discovery of North Sea Oil)
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Pros and Cons of Unification: EU
Why adjustment is hard
– Like states in the US, countries in Eurozone have
No exchange-rate tool
No separate monetary policies
Very limited fiscal policies (due to SGP)
– Unlike US states, however, in Eurozone
Labor is less mobile across countries
Wages are less flexible, due to social policies
No mechanism for fiscal transfers among countries
Without adjustment
– When one country is hit with a shock that others are not
(i.e., an “asymmetric shock”),
Its markets don’t adjust (rigid wages)
Its people don’t move
It has fewer policies to deal with this
Other countries don’t help
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Europe
• Size: 10.180.000 km² European Union
• Inhabitants: 742,452,000 • Size:
• 50 officially recognized 4,324,782 km2
countries, 5 countries • Inhabitants:
with limited recognition 508,191,116
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EU - Institutions, Bodies and Agencies
European Council
(summit)
Council of Ministers
European Parliament (The Council) European Commission
European Investment
Agencies European Central Bank
Bank
https://www.youtube.com/watch?v=j9MjHN-lU1I
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The European Commission – promoting the common interest
EU Legislature
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Common EU trade policy
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Euro zone: 19 countries
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France 633
Spain 506
Sweden 439
Germany 357
Finland 338
Poland 313
Romania 238
Greece 132
Bulgaria 111
Hungary 93
Portugal 92
Croatia 88
Austria 84
Czech Republic 79
Do we have a common European heritage?
Lithuania 65
Latvia 65
Slovakia 49
Estonia 45
Netherlands 42
Slovenia 20
Cyprus 9
Luxembourg 2.6
Malta 0.3
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Do we have a common European heritage?
24 official languages
More then 35 recognised regional minority-languages
As many CULTURAL differences…
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EU Free Trade Agreements
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World Institution:
World Trade Organization
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World Trade Organization Rouds
Rounds of GATT
Multilateral Trade Negotiations
No. Years Name Accomplishments
1-5 1947-61 Reduced tariffs
6 1964-67 Kennedy Tariffs + anti-dumping
7 1973-79 Tokyo Tariffs + NTBs
8 1986-94 Uruguay Tariffs, NTBs, Services, Intellectual Property,
Textiles, Ag., Dispute Settlement, Created
WTO
9 2001-15 Doha FAILED: Doha Development Agenda
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What the WTO Stands for….
Non-discrimination
More “open”- ness
Predictability and transparency
More competitiveness
Benefits for less developed countries (>75% are
“developing” or LDCs)
Protection for the environment***
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WTO Functions
Communication Ministerials
Negotiating Rounds
Working Groups
Trade Policy Review
Mechanism
Councils and Committees
WTO Functions
Constraints Tariff Bindings
Customs Valuation
Product Regulations
Quantitative Restrictions
Subsidies
Foreign Direct Investment (TRIMS)
Services (GATS)
Intellectual Property (TRIPs)
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WTO Functions
Exceptions Anti-Dumping
Countervailing Duties
Safeguards
Balance of Payments Protection
Preferential Trade Agreements
WTO Functions
Dispute Settlement Consultation
Panel Recommendation
Appellate Body
Remedy Implementation
Compensation
Retaliation
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World Trade Organization: Today
WTO’s Two Basic Principles
1. MFN = Most Favored Nation
Each member country should treat all members as well as it
treats its “most favored nation” (i.e., the member that it
treats the best)
2. National Treatment
Once a product or seller has entered a country, it
should be treated the same as products or sellers that
originated inside that country
(There are many permitted exceptions to both of these principles)
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World Trade Organization: Today
The Doha Round/Doha Development Agenda (2001-
)
– Focused on trade issues of importance to developing countries
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ASEAN Vision
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ASEAN
3-123
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ASEAN
Association of Southeast Asian
Nations
10 Member States:
Brunei Darussalam Myanmar
(7 January 1984) (23 July 1997)
Cambodia Philippines
(30 April 1999) (8 August 1967)
Indonesia Singapore
(8 August 1967) (8 August 1967)
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Gross Domestic Product 2014
COUNTRIES GDP
1. United States 17,419,000
2. China 10,360,105
3. Japan 4,601,461
4. Germany 3,852,556
5. United Kingdom 2,941,886
ASEAN 6. France 2,829,192 USD 2.48
7. Brazil 2,346,118 trillion
8. Italy 2,144,338
9. India 2,066,902
10. Russia Federation 1,860,598
World 77,868,768
Source: World Development Indicators, The World Bank (As of 1 July 127
2015)
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ASEAN Economies’ Development Indexes:
Global Ranks’ Comparison
Doing Business
HDI Infrastructure Indicator
(2013) (2013) (2013)
Singapore 18 2 1
Brunei 30 58 79
Malaysia 64 29 12
Thailand 103 47 18
Philippines 114 96 138
Indonesia 121 61 128
Vietnam 127 82 99
Laos 138 84 163
Cambodia 138 101 133
Myanmar 149 141 n/a
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ASEAN
Highly connected:
Physically,
Institutionally and
among the Peoples
Free trade agreements
with major regional
economies
Young, educated
labour force
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ASEAN: A Community of Opportunities
GDP:
Huge Market:
USD 2.4
625 million+ people
trillion
Courtesy of ASEAN National Tourism
Organisations
FDI: Steady
USD 122.4 economic
billion growth rate
Young,
Highly Connected
educated labour
Region
force
Courtesy of ASEAN National Tourism Organisations
Free Trade
Agreements with
major regional
economies
Courtesy of ASEAN National Tourism Organisations
Image source: Flickr.com/RussellGilbert
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ASEAN: A Community of Opportunities
Vast natural
resources
Courtesy of ASEAN National Tourism Organisations Courtesy of ASEAN National Tourism Organisations
ASEAN:
A people-oriented community
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AEC Blueprint: Adopted Nov 2007
ASEAN ECONOMIC
COMMUNITY
STRATEGIC SCHEDULE OF THE AEC BLUEPRINT (2008-2015)
1. Single Market 2. Competitive 3. Equitable 4. Integration into
& Production Base Economic Region Economic Global Economy
Development
• Free flow of goods • Competition policy • Coherent approach
• Free flow of • Consumer • SME development towards external
services protection Initiative for ASEAN economic relations
• Free flow of • Intellectual property Integration • Enhanced
investment rights participation in
• Freer flow of capital • Infrastructure global supply
• Free flow of skilled development networks
labour • Taxation
• Priority Integration • E-Commerce
Sectors
• Food, agriculture
and forestry
AEC Milestones
1967 1977 1992 1995 1997 1998 2003 2004 2007 2008 2009 2011 2015
ASEAN ASEAN
Preferential Framework ASEAN Hanoi Roadmap for AEC
Trading Agreement Investment Plan of AEC an ASEAN
Agreement on Services Agreement Action Blueprint Community
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AEC 2025
Resilient, inclusive,
people-oriented and
Global ASEAN
people-centered
ASEAN
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The ASEAN Plus Agreements
ASEAN has established FTAs with some of the world’s major economies
as part of its broader trade liberalisation agenda. The ASEAN Plus FTAs
are as follows:
ASEAN-China Free Trade Area (ACFTA)
ASEAN-Japan Comprehensive Economic Partnership (AJCEP)
ASEAN-Korea Free Trade Area (AKFTA)
ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)
ASEAN-India Free Trade Area (AIFTA)
➢ Plus multiple bilateral FTAs of single ASEAN members
➢ Today: more than 90 bilateral, plurilateral and multilateral FTA
treaties concluded and under negotiations (ADB, 2015).
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AD @ UEF 2018
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Vietnam: International Economic
Integration
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AD @ UEF 2018
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AD @ UEF 2018
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What is APEC?
• Established in 1989.
• Forum for facilitating economic growth,
cooperation, trade and investment in the Asia-
Pacific region.
• Intergovernmental grouping that operates on the
basis of non-binding commitments, open dialogue,
and equal respect for the views of all participants.
• Composed of 21 Member Economies.
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APEC’s Significance
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Trade and economic growth
Elasticity
Period Observations Overall R2
(in %)
APEC Economies
1960-1988 0.428 376 0.687
1989-2013 0.565 453 0.783
Rest of the World
1960-1988 0.305 1,914 0.737
1989-2013 0.389 2,878 0.886
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