REGIONAL ECONOMIC

INTEGRATION
 1. I GST A. A. TATA INTAN TAMARA
(1607531009)

 2. NADIRA PRADNYA PARAMITA

(1607531111)
.
 I II III
Definition of Regional Definition of Regional Levels of
Trade Agreement Economic integration Regional Trading

IV V VI
Effect of Regional Benefits of Regional Drawbacks of
Economic integration integration Regional Trading

The Power of PowerPoint | thepopp.com 3

Integration in Integration in
Europe Asia

VII VIII IX X

Integration in
Integration in the
Middle East and
Americas
Africa.

The Power of 4
 Regional trade agreement are charging the
landscape of global marketplace companies like
Nestle of Switzerland are finding that these
agreements lower trade barriers and open new
market for goods and services. Trade
agreement can also become double-edged
swords for many companies.

The Power of 5
Regional economic integration is the process whereby countries in a geographic region
cooperate to reduce or eliminate barriers to the international flow of products, people or
capital. The goal of nations undergoing economic integration is not only to increase
cross-border trade and investment, but also to raise the living standards for their people.

The Power of 6
 Economic integration whereby
countries seek to remove all barriers
A. Free Trade to trade among themselves, but each
countries determines its own barriers
Area against nonmembers. A free trade
area is the lowest level of economic
integration that is possible between
two or more countries
 Economic integration whereby
countries remove all barriers to
trade among themselves, but
B. Custom Union erect a common policy against
nonmember. The main difference
between a free trade area and a
custom union is that the member
of custom union agree to treat
trade with all nonmembers
nations in a similar manner
 Economic integration where
countries remove all barriers to
trade and the movement of labor
and capital among themselves,
C. Common Market but erect a common trade policy
against nonmember. A common
market integrates the elements of
free trade areas and custom
unions and adds the free
movement of important factor of
production-people, and cross
border investment.
 Economic integration where
countries remove all barriers to
trade and the movement of labor
and capital among themselves,
D. Economic Union erect a common trade policy
against nonmember and
coordinate their economic policy .
Economic union require that
member countries concede a
certain amount of their national
autonomy the supranational
union which they are a part.
 Economic and political
integration whereby countries
coordinate aspects of their
E. Political Union economic and political
system. A political union
requires member nations to
accept a common stance on
economic and political
manners regarding
nonmember nations.
 Few topics in international business
are as hotly contested and involve as
many groups as the effects of
regional trade agreements on people,
jobs, companies, cultures, and living
standards.

The Power of 12
 Trade creation
The increase in the level of
trade between nations that
result from regional economic
integration is called trade Greater consensus
creation Benefits of trying to eliminate
Political cooperation trade barriers in smaller groups of
countries is that it can be easier to
Integration involving political gain consensus from fewer
cooperation can also reduce member as opposed.
the potential for conflict military Employment opportunities
between member nation. Expand employment
opportunities by enabling
people to move from one
country to another country to
find work or, simply, to earn
higher wage

The Power of 13
 Trade diversion can occur after
the formation of trading bloc
because of the lower tariffs
charged among member nations.
A. Trade diversion It can actually result increased
trade with a less efficient
producer within trading bloc and
reduced trade with a more
efficient, nonmember producer.
 The formation of trading bloc
promotes efficiency by significantly
reducing or eliminating barrier to
trade among its members. The
surviving producer of particular
good or service, then is likely to be
B. Shifts in employment
the bloc’s most efficient producer.
Industry requiring mostly unskilled
labor. For example tend to respond to
the formation of a trading bloc by
shifting production to a low-wage
nation within a bloc
 Successive levels of integration
requires that nations surrender
more of their national sovereignty.
The least amount of sovereignty
that must be surrendered in the
C. Loss of national trading bloc occur in a free trade
area. By contrast, a political
sovereignty union requires nation to give up a
high degree of sovereignty in
foreign policy. This is why a
political union is so hard to
achieve.
Structure of the European Union

a. European Union

Structure of the European Union

•European parliament
Consists of 736 members elected by popular vote
within each member nation every five years.
•Council of the European union
The council is the legislative body of EU
•European commission
The commission is the executive body of the EU. The EU grew out of a desire to form a single European
•Court of justice political entity to end the centuries of warfare among
The court of justice is the court of appeals of the EU European countries that culminated with World War II
•Court of auditors and decimated much of the continent. The European Single
The court of auditors comprises 27 members (one Market was established by 12 countries in 1993 to ensure
the so-called four freedoms: the movement of goods,
from each member nation) appointed for renewable
services, people and money.
six year terms 17
•European Free Trade Association (EFTA)

b. European Free
Trade
Association
(EFTA)

Certain nations in European were reluctant to join in the ambitious goals of the EU, fearing destructive
rivalries and loss of national sovereignty. Some of these nations did not want to be part of common market
but instead wanted the benefits of free trade area. So in 1960 several countries banded together and
former the European Free Trade Association (EFTA) to focus trade in industrial, not consumers, goods.
Because some of the original members joined EU and some new members joined EFTA.

The Power of 18
a. North American Free Trade
Agreement (NAFTA)

As a free trade agreement, NAFTA

seeks to eliminate all tariffs and
nontariff trade barriers goods on
originating from within North
America. The agreement also calls
for liberalized rules regarding
government procurement
practices, the granting of
subsidies, and the impositions of
countervailing duties

19
 The “Andean Community” or A.C.
(Spanish: Comunidad Andina, CAN), previously
CAFTA-DR aim to reduce tariff and nontariff
known as the “Andean Pact”, is an intergovernamental
barriers against U.S exports to the region. It also organization created by Bolivia, Peru, Venezuela,
ensures that U.S companies are not disadvantage Columbia and Ecuador with the aim to promote the
by Central American nation trade agreement expansion of markets and guarantee an effective
between Mexico, Canada , and other countries economic development to the region.
The Power of 20
The ALADI agreement calls for the preferential MERCOSUR is progressing on trade and
tariff agreement to be made between pairs of investment liberalization and is emerging as
member nations that reflect the development the most powerful trading bloc in all of Latin
economic of each nation. The agreement doesn’t America
accomplish a great deal a cross border trade.
The Power of 21
 f. Central American
and the Caribbean

A key CARICOM agreement calls for

establishment of CARICOM single
Was formed in 1961 to create a common
market, which would establish the free
market among Costa Rica, El Salvador,
movement of factors of production
Guatemala, Honduras, and Nicaragua.
goods, services, capital, and labor

The Power of 22
 g. Free Trade Area of the
America (FTAA)

The objection of the FTAA is to

create the largest free trade
area on planet, stretching from
northern tip of Alaska to the
southern tip of Tierra del
Fuego, in South America

23
a. Association of Southeast
Asian Nation (ASEAN)

Three main objectives of the

alliance are to (1) promote
economic cultural, and social
development in the region; (2)
safeguard and region’s
economic and political stability;
and (3) serve as forum in which
differences can be resolved
fairly and peacefully.
24
 Australian and New Zealand created a free trade
Was formed in 1989. Begun as an informal forum agreement in 1966 that slashed that tariffs and
among 12 trading partners, APEC now has 21 quotes 80 percent by 1980. The agreement’s
members. Together, the APEC nations accounts success encouraged the pair to form the Closer
for more than 40 percent of world trade and Economic Relations Agreement in 1983 to
combined GDP more than $19 trillions. advance free trade and further integrate their two
The economies.
Power of 25
 a. Guild Cooperation
Council (GCC)

Was formed in 1980. Members of

the GCC are Bahrain, Kuwait,
Oman, Qatar, Saudi Arabia, and
the limited United Arab Emirates.
The primary purposes of the GCC
at its formations was to
cooperative with the increasingly
power full trading blocks in Europe
at the time, the EU and EFTA

26

Was formed in 1975 but restarted efforts at
economic integration in 1992 because of the lack
of early progress. One of the most important goals
of ECOWAS is the formation of custom union, an
eventual common market, and a monetary union.
Specifically, the stated aims of the AU are to (1) rid the
content of remaining vestiges of colonialism and
apartheid, (2) promote unite and solidarity among African
states, (3) Coordinate and intensify cooperation for
development, (4) safeguard the sovereignty and territorial
integrity of members, and (5) promote international
cooperating within the framework of the United Nation.

The Power of 27
DISSCUSION
SECTION

The Power of 28
T H A N K YO U !