‎Define: This is an agreement between
‎ ountries located in a geographical area
‎In 2006, six CARICOM members formed the
‎ aribbean Single Market and Economy (
C ‎ ARICOM (among English-speaking
‎CSME) - to lower trade barriers and
‎harmonize macro-economic and monetary
‎policy between members
‎ r‎ emoves trade barriers between member
‎ bolished tariffs on 99% of the goods traded
a ‎December 31, 1992
‎between members
‎
‎removed most barriers on the cross-border
f‎ low of services
‎establishes two commissions to impose fines
‎ nd remove trade privileges when
a
‎environmental standards or legislation
‎involving health and safety, minimum wages,
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‎through which tariff and non-tariff barriers to
‎the free flow of goods, services and factors
‎of production are reduced. between other
‎countries.
‎
‎Regional Economic Integration ‎
‎ epending on the level of integration, allow
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‎the factors of production to move freely
‎between countries.
‎ pens new markets
o
‎
‎Regional economic integration
‎ ‎ llows companies to know how to save costs
a
‎by concentrating production in locations
‎where the combination of factor and skill
‎costs is optimal
‎ hat Does Economic Integration
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‎ any countries are members of more than
M ‎Mean For Managers? ‎
‎one of the nine blocs in the region ‎within each grouping, the business
‎ ‎environment becomes competitive
‎ ut
B ‎
‎ ut, since many countries support the use of
B
‎trade barriers to protect their economies ‎
t‎ here is a risk of being shut out of the single
‎from foreign competition, meaningful ‎Regional Trade Blocs In Africa ‎market by the creation of a “trade fortress”
‎progress is slow
‎
‎
‎ he East African Community (EAC) was re-
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‎launched in 2001, however so far, the effort ‎The biggest effort is the North American Free
‎appears futile ‎ rade Agreement ( NAFTA).
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‎ ‎ hat is the status of economic
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‎integration in the Americas? ‎Andean Community
‎Other efforts include:
‎Mercosur
‎ urrently includes Brunei, Indonesia,
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‎Malaysia, the Philippines, Singapore,
‎Thailand, Vietnam, Myanmar, Laos, and
‎Cambodia I‎ncluding 11 nations
‎ ‎ he Association of Southeast Asian Nations (
T ‎The Comprehensive and Progressive Trans- ‎
‎ASEAN, 1967) ‎ acific Partnership (CPTPP) was signed in
P
‎ ants to foster free trade between member
w ‎ ‎Chile on March 08, 2018. ‎To lower tariffs and other trade barriers
‎countries and to achieve some cooperation ‎ ‎ etween the 11 nations
b
‎in their industrial policies ‎ he Association Of Southeast
T ‎
‎ ‎Asian Nations ‎Other Trade Agreements
I‎ncluding 10 members of ASEAN plus
‎An ASEAN Free Trade Area (AFTA) between ‎Australia, China, Japan, New Zealand, and
‎ SEAN and AFTA are moving towards
A
t‎ he six original members of ASEAN came into ‎South Korea
‎establishing a free trade zone ‎ he Regional Comprehensive Economic
T
‎effect in 2003 ‎
‎ ‎Partnership (RCEP)
‎
‎
‎ as ratified by member states in Nov 2020
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‎
t‎ he Central American Trade Agreement (
‎CAFTA, 2005) - to lower trade barriers
‎between the U.S. and members . r‎ emoves all barriers to the trade of goods
‎There are two other trade pacts in the
‎ he Central American Free Trade
T ‎and services among member countries.
‎ mericas which have not much progress:
A
‎ ‎Agreement (CAFTA) and CARICOM ‎Free trade area
C ‎ emove all trade barriers between members
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‎Caribbean countries) (1973) - to establish a ‎with each country and define its own barriers
‎customs union ‎to non-members.
‎
‎countries and adopts a common policy
‎toward nonmembers
‎Customs Union
f‎ ormed in 1969 (Bolivia, Chile, Ecuador,
‎Colombia, Peru) using the EU model ‎adds the requirement that all members sets a
‎ ‎ ommon trade policy against nonmembers.
c
‎ ad more or less failed by the mid-1980s
h ‎ as no trade barriers member countries,
h
‎ ‎common policy toward nonmembers and the
‎free movement of the factors of production (
‎ as re-launched in 1990 (Bolivia, Ecuador,
w ‎no restrictions on immigration, emigration or
‎Colombia, Peru, Venezuela), and now ‎cross-border flow of capital).
‎Common market
‎operates as a customs union
‎ ‎ evels Of Regional Economic
L ‎ dds the free movement of labor and capital
A
‎The Andean Community?
‎and sets a common trade policy against
s‎ igned an agreement in 2005 with
‎Integration ‎nonmembers.
‎MERCOSUR to restart negotiations towards
‎the creation of a free trade area. Those ‎has the free flow of products and factors of
‎negotiations are proceeding at a low space. ‎ roduction between members, a common
p
‎ ‎external trade policy, a common currency, a
‎harmonized tax rate, and a common
I‎n late 2006, Venezuela withdrew from the ‎monetary and fiscal policy.
‎Andean Community as part of that country’s ‎
‎Economic union
‎attempts to join MERCOSUR
‎ ‎ sk members to harmonize their tax,
A
‎Regional Economic ‎monetary and financial policies, create a
‎common currency, and assume some
‎Require automakers to produce 75% of ‎Integration ‎sovereignty for the organization.
‎ ehicle content in North America to qualify
v
‎for zero tariffs ‎ i‎nvolves a central political apparatus that
‎coordinates the economic, social, and
‎
‎foreign policy of member states.
‎
‎ y 2030, 40% of parts for any tariff-free
B ‎Political union
‎vehicle must come from a so-called high
‎ equires members to coordinate their
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‎wage factory (paying a minimum of USD 16
‎economic and political policies against
‎an hour in average salaries for production
‎nonmembers, with a few exceptions.
‎workers)
‎ ‎ SMCA (2018) is an updated version of the
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‎original NAFTA treaty, with some key ‎ he United States – Mexico –
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‎ pen up the Canadian diary market to US
O ‎changes: ‎Canada Agreement (USMCA) ‎ ll countries gain from free trade and
A
‎producers ‎ ‎investment
‎ ‎ enefits of regional economic
B
‎ reates incentives for political cooperation
c
‎integration
‎ ake some changes to intellectual property
M ‎and reduces the chance for violent conflict
‎Linking countries together making them more
‎regulations ‎ ependent on each other
d
‎ ‎ ives countries greater political influence
g
‎when dealing with other nation
‎Add a 16-year sunset clause (meaning the
t‎ erms of the agreement expirer)
‎
‎ hile a nation as whole may benefit from a
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‎regional free trade agreement, certain
‎ conomic integration can be difficult
E ‎groups may lose.
‎ riginated in 1988 as a free trade pact
o ‎because :
‎between Brazil and Argentina ‎losing some degree of national sovereignty
‎
‎Key issues limit integration t‎ rade creation : occurs when low cost
‎ as expanded in 1990 to include Paraguay
w ‎producers within the free trade area replace
‎and Uruguay ‎high cost domestic producers
‎ ‎ egional economic integration is only
R ‎
‎beneficial if the trade creation- trade
‎ 012: Venezuela joined MERCOSUR, but in
2 ‎diversion . t‎ rade diversion : occurs when higher cost
‎2016 Venezuela was suspended from ‎suppliers within the free trade area replace
‎MERCOSUR for violating the pact’s ‎MERCOSUR? ‎lower cost external suppliers
‎democracy principles and human rights ‎
‎
‎ ay be diverting trade rather than creating
m
‎trade, and local firms are investing in ‎The devastation of two world wars on
‎industries that are not competitive on a ‎ estern Europe prompted the formation of
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‎worldwide basis ‎the EU
‎ ‎
i‎nitially made progress on reducing trade ‎ orerunner was the European Coal and Steel
F
‎barriers between member states, but more ‎Community (1951)
‎recently efforts have stalled ‎
‎
‎ he European Economic Community (1957)
T
‎was formed at the Treaty of Rome with the
‎goal of becoming a common market
i‎ncludes the United States, Canada, and ‎
‎Mexico
‎ ‎ ommitted the EC countries to work toward
c
‎establishment of a single market by
‎
‎ as born out of EC members' dissatisfaction
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‎The Single European Act (1987) ‎with the community's failure to deliver on its
‎ ‎promises.
‎ ‎
‎ rotects intellectual property rights
p ‎ he North American Free Trade Agreement (
T ‎ hat Is The North American Free
W ‎ rovided the impetus for the restructuring of
p
‎ ‎NAFTA, 1994). ‎Trade Agreement? ‎substantial sections of European industry
‎allowing for faster economic growth than
‎removes most restrictions on FDI between ‎would otherwise have been the case
t‎ he three member countries ‎
‎
‎ reated the second largest currency zone in
c
‎ llows each country to apply its own
a ‎ he Maastricht Treaty (signed in Feb 1992)
T ‎the world after that of the U.S. dollar
‎environmental standards ‎committed the EU to adopt a single currency ‎
‎ ‎by Jan 1, 1999
‎ ‎ sed by 19 of the 27 member states now
u
‎
s‎ avings from having to handle one currency,
‎rather than many
‎or child labor are ignored ‎
‎
‎What Is The Euro? ‎it is easier to compare prices across Europe,
s‎ o firms are forced to be more competitive
‎
‎Benefits of the euro
‎
‎ ives a strong boost to the development of
g
‎The European Union ‎highly liquid pan-European capital market
‎
i‎ncreases the range of investment options
‎Is The Euro A Good Thing?
‎open both to individuals and institutions
‎
l‎oss of control over national monetary policy
‎
‎ osts of the euro
C
‎
‎ U is NOT an optimal currency area
E
‎
‎ 3 June 2016, the British electorate voted in
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‎a national referendum to leave the EU
‎
I‎n early 2017, the British government formally
‎notified the EU of its intention to exit the EU
‎
‎ fter exiting on Jan 31, 2020, the British had
A
‎until Dec 20, 2020, to negotiate a trade deal
‎Brexit
‎with the EU
‎
‎ he exit of Britain creates an existential
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‎problem for the EU
‎
‎As for Britain, most experts predict that the
‎ ountry will bear short to medium term costs
c
‎as a result of this decision
‎
r‎ esponsible for EU legislation, implementing
‎The European Commission ‎and monitoring member states to ensure
‎they comply with EU legislation.
t‎ he ultimate controlling authority within the
‎EU because the draft legislation from the
‎commission can become EU law only if the
‎The European Council
‎council agrees.
‎ hat is the political structure of the
W ‎
‎European Union ? ‎
‎ ebates legislation proposed by the
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‎commission and forwarded to it by the
‎The European Parliament
‎council
‎
‎ ‎the supreme appeals court for EU law
‎The Court of Justice ‎