...Advantages & Disadvantages of Regional Integration By David Alfredo, an eHow Contributing Writer Regional integration, advantages and disadvantages. In recent decades, the globalization of markets and the expansion of free-trade agreements have prompted many areas of the world to consider regional integration as a means to better compete in the world economy. Countries that alone may not have sufficiently large markets for production and consumption join together with regional neighbors in order to form areas where goods and labor can flow relatively freely in response to market demand. This allows the region to leverage the comparative advantage of many countries into one unified block of economic activity. As with every complex political and economic venture, regional integration is not without its risks. In order to better understand the issue, it is necessary to examine both the advantages and disadvantages of regional integration. First Advantage: Larger Markets Regional integration usually allows several different countries to come together and form common markets. This is done by opening up borders and eliminating tariffs and taxes on imports and exports between member nations. Where before it might have been difficult for a manufacturer in country A to find enough demand, it is now able to easily market and sell its products in countries B, C and D, thus allowing it to expand its business. Manufacturers and other firms operating in countries B, C and D can...
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...Disadvantages of Regional Integration Southeastern Asian countries have made a significant achievement in social and economic development during the past two decades of renovations. The road to success was not always smooth, and although regional integration presents many benefits, there are several disadvantages to that approach. The below analysis will reflect on few of them to present the main challenges in developing countries integrated under the Association of Southeast Asian Nations (ASEAN). Disadvantages of Regional Integration Today’s business world perceives regional integration as a positive outcome for countries within geographical region. As with every aspect there are several disadvantages to regional and economical integration. Countries switch to tariff free imports of same goods, but the tariffs on goods from the outside remain. As a result economists notice a less efficient use of resources. Oftentimes, the goods produced within the region are of a much lower quality than those imported from the outside. In political aspect, governments loose tax revenue from a tariff free trading. Significant amount of revenue comes into the country’s government from import tariffs. Removal of them causes decrease in available capital. The effect on government’s spending programs could have a further negative impact on country’s development (Openbook, 2011). Other challenges with regional integration include: equality between members, ways...
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...Regional Integration for and Against Articles MGT/448 2014 Regional Integration for and Against Articles Regional Integration Trade blocs are agreements to help reduce trade barriers between participating states, regions, or countries ("trade bloc," 2014). The concept of regional economic integration takes the trade bloc concept and centers it into different regions on the globe. Regional economic integration is an agreement to reduce regional trade barriers, remove tariffs and non-tariff barriers that will hinder the flow of free trade of goods, services, and factors of production among countries in a geographic region (Hill, 2009). There are many regional trade blocs in place today that have achieved harmonious and non-harmonious integration. Following is a closer look at some of the advantages and disadvantage one trade bloc that is situated in the Caribbean region named, Caribbean Community (CARICOM) and its expansion into CARICOM Single Market and Economy (CSME). Caribbean Community (CARICOM) The Caribbean Community (CARICOM) was established in July 1973 as an expansion of the former Caribbean Free Trade Association (CARIFTA) that had been in place for seven years prior ("Caribbean community (caricom)," 2014). The CARICOM trading bloc profile states that it goes beyond the normal boundaries of free-trade to encompass programs that will sustain economic development within the region ("Caribbean community (caricom)," 2014). States located outside the CARICOM...
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...What is integration? European Integration is the process of industrial, political, legal, economic, social and cultural integration of states in Europe. European Integration has primarily come about through the European Union and the Council of Europe. Economic integration is abolition of various restrains of trade between nations. Economic integration occurs through the reduction of all obstacles to trade and to the free flow of capital and labor across countries, so when a group of countries abolishes all restrictions to trade and the free flow of capital and labor among themselves, they participate in what is called a common or single market. European economic integration begun in 1951 when trade restrictions on coal and steel were dropped between Belgium, Germany, France, Italy, Luxembourg and the Netherlands. The advantages of becoming a member of a single market are: greater specializations and more efficient use of economic resources, cheaper products (through imports and increased competition) and easier access to foreign markets in which the home producer can sell. There are also disadvantages like bankruptcy of businesses that are not competitive in the world market; an example is the decline of the textile industry in North Carolina once trade restrictions were lifted with Mexico and a number of Asian countries. Another disadvantage is increased migration of workers from poor to rich countries as they search for relatively high paying jobs, although increased...
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...Instructor: MICHAEL GAY Schedule: 10/12/2011 - 11/09/2011 Campus: SOUTH COAST LEARNING CENTER Group ID: SC11BSM06 Regional Integration for and against Articles EU Regional Integration Advantages The development of our world economy displays its escalating integrity and is based on international specialization and also co-production, and not the mention the consolidation of economic relations among states and business entities. Integration is a judicial law of the progress of international economic relationship. European Union is the foremost commercial power in our world today. The EU has attained the national unity in the economic and social policy: not a member of the EU can’t secure the prices of agricultural products or to enter in commercial agreements with third world countries or relations, state aid to companies individually have to be held in beneath the Brussels treaty. Countries have to meet the terms with general rules, environmental safety and consumer protection as well. The reaction of the leading countries: the influential’s talked about their success of monetary union. The key advantages of regional integration is having newer, cheaper, faster and more diversified, goods, resources, services, facilities, ideas and knowledge as well as higher living standards available. The powerful forces of international economic integration are the companies. They are interested in achieving an optimal level of activity, including throughout co-operation with distant...
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...Regional Integration Ashleigh Addis MGT/448 April 10, 2013 Christy Vasconcellos Introduction Regional integration is achieved when two or more nation states enter into a regional agreement usually for economic or political purposes. The primary objective for regional integration is to help nations to overcome any trading hurdles or political problems that could potentially arise. These problems could be linked to the countries government, economy, and geographic layout. There are many different countries that have made some type of an agreement with another country. In North America, regional integration among America, Canada, and Mexico has had both advantages and disadvantages. The NAFTA, which was first established in 1992 but did not become officially until 94, has become an important part of all three countries. Although all three countries have benefited from the NAFTA, this paper will cover the advantages and disadvantages it has had on Mexico. Advantages of the NAFTA It is safe to say that for the most part the NAFTA has been primarily a blessing for Mexico. A huge advantage for Mexico is the boost it has had on them economically. NAFTA decreased tariffs; essentially meaning that the exports and imports from Mexico increased due to the lower taxes. The NAFTA created many jobs for the people of Mexico. With the increase of jobs, came an increase in wages. The NAFTA is the largest free trade and creates more than $17 trillion in goods and services produced by...
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...Regional Integration for and Against Articles University of Phoenix MGT-448 Stephen D. Julias, III April 2, 2011 Abstract Regional integration has been around for a long time. A definition is not easily formulated. Ordinarily the term refers to the integration of a nation of states into a larger collection. Regional integration can be described on one hand, as a vital method that requires a country’s eagerness to contribute to or unite into a larger whole. The extent of which the country shares and what the country shares establishes the level of integration. The different levels of integration are dependent on a predefined criterion. The descriptions of levels are the advantages and disadvantages of regional integration and how the stage for economic development relates to a potential business opportunity. The Advantage NAFTA The North American Free Trade Agreement (NAFTA) is an economic, international trade treaty connecting three nations that inhabit the North American continent (Canada, Mexico, and the United States) that began in 1994. NAFTA is designed to remove various trade barriers between Canada, Mexico, and the United States as well as a reduction or elimination of numerous tariffs and nontariff barriers. NAFTA is exceptional in that it has created the foremost regional integration agreement linking two highly developed countries, the United States and Canada, and a developing country, Mexico. Export opportunities have grown under NAFTA because of the tariffs...
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...Regional Integration for and Against Articles NAFTA (North American Free Trade Agreement) is a free trade agreement involving Mexico, Canada, and the United States. NAFTA is the most limited of the free trade unions. NAFTA is restricted to eliminating tariffs, quotas, and other trade impediment among Canada, Mexico, and the United States. NAFTA has advantages and disadvantages of regional integration, and also showing how it persons would favor, and be against it. Integration and agreements made will reduce tariffs barriers that are associated with trades of good, services, and the factors of produced goods between countries (Hill, 2009). Advantages Between the two countries Canada and the United States NAFTA has eliminated most of the tariffs, which are incorporated in the trades of the products. One of the main advantages is that it will provide a higher quality of goods, and services to consumers in all countries at a lower rate. In January 1994 NAFTA became the biggest trade bloc in the world in relation to GDP (Gross Domestic Product) all, while becoming a key force in escalating the agricultural trade between Canada and the U.S. Trades between Mexico, Canada, and the U.S. have gotten better throughout the life of the unification (Free Trade Bloc, n.d.). The advantage of integration regionally is that there are no imposed restrictions on the trade. This will allow countries to focus on the services and...
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...Analysis and ASEAN Michael Concepcion MGT448 July 16, 2012 Martha Alcala Regional Analysis and ASEAN Regional integration can provide stability to a nation’s economic and political arenas. However, regional integration can be costly if trade diversion is not considered. The Association of Southeast Asian Nations (ASEAN) is advantageous for the member countries because it offers promise of solidarity and economic prosperity. However, historically member countries of ASEAN have not always been political allies and unresolved territorial disputes are still an issue. Finally, economic development of the countries of ASEAN is becoming increasingly enticing to larger countries such as China and America because of its potential “…as a market and production center for big companies from all over the world.” (Rabin, 2012) Regional Integration Regional integration can open up trade amongst nations that can have economical and political advantages but can often be costly due to diversion. Two cases can be made for regional integration. First, the economical advantages stem from the theory of free trade. According to Hall (2009), “…the theoretical ideal is an absence of barriers to the free flow of goods, services, and factors of production among nations.” (pg. 279, para.2) Regional integration among a few countries is easier to coordinate and function than integration on a global scale. Regional integrating bodies like the Association of Southeast Asian Nations (ASEAN), represent...
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...Global Business Strategy Formulation Hector Garcia MGT/448 Global Business Strategies January 20th 2013 University of Phoenix Prof. Louis M. Lozada-Sorcia Regional Integration for and Against Articles Regional integration has been around for a long time. A definition is not easily formulated. Ordinarily the term refers to the integration of a nation of states into a larger collection. Regional integration can be described on one hand, as a vital method that requires a country’s eagerness to contribute to or unite into a larger whole. The extent of which what the country shares and establishes in level of integration. The different levels of integration are dependent on a predefined criterion. The descriptions of levels are the advantages and disadvantages of regional integration and how the stage for economic development relates to a potential business opportunity. The main advantage of NAFTA is that it is the world's leading free trade area, connecting more 400 billion people and producing $11 trillion worth of goods and services. NAFTA has two-thirds of the United States exports entering Mexico duty-free and nearly all U.S. exports to Canada enter duty-free. Each day, just about $1.8 billion is trilateral trade between NAFTA countries. The United States manufactured exports to NAFTA partners increased 78% in the first six years. Massachusetts exports almost $1 billion more to Canada than to any other country in the world...
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...Describe the legal, cultural, and ethical challenges that confront the global business presented in your selected case study. Determine the various roles that host governments played in this particular global business operation. Summarize the strategic and operational challenges facing global managers illustrated in your selected case. Regional integration is a term which has been used for a long time. The definition of regional integrations is mainly the shifting of particular federal activities toward a new point. Regional integration is also considered to be an important process which compels a country’s enthusiasm to donate or combine into a larger unit to obtain certain goals. The goals achieved through regional integration can be political integration or free trade, as in North American Free Trade Association (NAFTA). There are different levels of integration and each level is dependent on a certain benchmark. The description for the different levels is the disadvantages and advantages of regional integration and the platform for how economic development connects with certain business opportunities. The Advantage of NAFTA The North American Free Trade Agreement also known as NAFTA is an effective trade agreement. NAFTA aids in the increase in agricultural trade and also to the venture between the United States, Canada, and Mexico, which also is a benefit to farmers, ranchers and consumers. NAFTA...
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...united states and its workers more competitive. In other words what will increase Us trade and the global trade. Douglas Irwin explain in the Hoover Digest that it is “free trade and better incentives [are the key], not protectionism.”(Irwin 2016) He and many other analysts blaming other nations for America's economic woes is the oldest campaign trick in the book. Moreover, he suggest that where protectionist policy fails is it assumes that trade is a zero sum game. This means that in a trade deal there would be some countries who win and some counties who lose. However from an economics perspective this thought process is faulty. In the highly globalized trade market, in the aggregate both sides benefit. Protectionism also threatens global integration. Many economic powers are outrightly against protectionist policies, including multilateral organizations such as the World Trade Organization. “No man is an island. Human beings or entities do not thrive when isolated from others.”(Nkusi, 2017) Protectionist policy directly or indirectly moves nations into a more isolationist state. Although full global integration seem like nothing more than a pipe dream, regional integration has shown evidence as being on of the most effective means of growth and development. This is more true for LDC nation, but also stands true for westernized nations like the United States. For instance,...
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...a. Briefly, what advantages and disadvantages does a country experience upon joining a regional economic alliance as in the European Union? Regional Economic union: its economic agreement between countries to facilitate the movement of money (capital), products, worker and all services, this union should have the same monetary and social policies European Union: It’s economic, borders and political union between the Europe countries (twenty seven countries) that have the same policy in all the areas Advantages joining regional economic alliance: 1. Increased economic integration Economic integration: is unification the policies between regional or no regional countries by cancel some trading restriction between the union countries ,...
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...European School of Economics Economics of Business and Finance Lecturer: Rexford Sam Student: Alessandro J. Nigra Date: May 29, 2016 Executive Summary The paper should present and discuss the most relevant old and new trade theories and all its components. Once they are presented, Integration may arise not only as a key concept but as one of the ultimate goals of international trade. Integration should be described and analysed not only theoretically but with the European case as framework. Finally, the conclusion may be presented showing all the benefits and drawbacks of integration. Table of contents Introduction 1 Analysis 2 Conclusion 9 Bibliography 11 Appendix 13 Introduction The aim of this project is to present, characterize, examine and analyse the nature and sense of the European integration. In order to achieve it some of the most important trade theories will be presented. Not only the classic ones but also some of the more recent ones, which will allow the analysis to fundament and give an accurate background to the idea of integration and all its components. The study should be focalized into the old classical trade theories of Absolute and Comparative Advantages, the Heckscher-Ohlin model and its Samuelson variation. Then, some of the newest classical trade theories such as the New Trade theory and the International Product Life Cycle theory will be discussed. Finally, it will be mentioned one new contemporary...
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...Discriminatory liberalization Customs Union Economics of European Integration Lecture 1: Economics of preferential liberalization Thomas Blondiau (Center for Economic Studies, KU Leuven) Louvain Institute for Ireland in Europe, January 2012 Thomas Blondiau (Center for Economic Studies, KU Leuven) Preferential liberalization Discriminatory liberalization Customs Union Introduction Graphical analysis Welfare Introduction Questions that we will answer in this section Why was/is the EU so successful? Thomas Blondiau (Center for Economic Studies, KU Leuven) Preferential liberalization Discriminatory liberalization Customs Union Introduction Graphical analysis Welfare Introduction Questions that we will answer in this section Why was/is the EU so successful? What economic forces are driving the spread of European integration? Thomas Blondiau (Center for Economic Studies, KU Leuven) Preferential liberalization Discriminatory liberalization Customs Union Introduction Graphical analysis Welfare Introduction Questions that we will answer in this section Why was/is the EU so successful? What economic forces are driving the spread of European integration? We use a simplifying (NICNIR) economic framework Thomas Blondiau (Center for Economic Studies, KU Leuven) Preferential liberalization Discriminatory liberalization Customs Union Introduction Graphical analysis Welfare Introduction Questions...
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