...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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...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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...China 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...
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...STRATEGIES 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 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 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 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)...
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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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...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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...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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...Regional integration can be described as the union of a geological area, the main theme running through the efforts is that of cooperation. Hence regional integration is the interaction and cooperation of various countries in a specific region working together in order to foster their own well being, the idea of integration suggests unity and teamwork. On the other hand, regional integration also refers to an outcome, occurring when pre set criteria are met. Regional integration involves some compromise on the part of nation states, but should enhance the general quality of life for the citizens of those states. Regional integration can be described as a dynamic process that entails a country’s willingness to share or unify into a larger whole. The degree to which it shares and what it shares determines the level of integration. Exploration of the factors promoting regional integration within the Caribbean * Common language - The language of the Caribbean people is English, and this facilitates easy communication. * Close Proximity - The Caribbean countries are relatively close to each other, hence, travel by air or sea from one country to another can be done in a relatively short space of time. * Caribbean countries share a common history - Most of the Caribbean people are descendants of people who had been subjected to slavery and indentureship. This makes it possible for the Caribbean people to embrace each other. * Common Cultural Heritage - The Caribbean...
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...• Chapter 9: Regional Economic Integration o Regional Integration and Economic Blocs • Under regional economic integration, groups of countries form alliances to promote free trade, cross-national investment, and other mutual goals. • This integration results from regional economic integration blocs (or economic blocs), in which member countries agree to eliminate tariffs and other restrictions on the cross-national flow of products, services, capital, and, in more advanced stages, labor within the bloc. • At minimum, the countries in an economic bloc become parties to a free trade agreement, which eliminates tariffs, quotas, and other trade barriers. o Levels of Regional Integration • For countries that become members of an economic bloc, there are various stages of regional integration. • First is the free trade area, which eliminates tariffs and other trade barriers. • Second is the customs union, a free trade area in which common trade barriers are imposed on nonmember countries. • Third is the common market, a customs union in which factors of production move freely among the members. • Fourth is the economic union, a common market in which some important economic policies are harmonized among the member states. • A true political union does not yet exist. o The Leading Economic Blocs • There are hundreds of economic integration agreements in the world. • The European Union (EU) is the most advanced, comprising twenty-seven countries in Europe. • It...
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...There is uninformed judgment whether regional trade arrangements help or hinder multilateral liberalization. It depends on certain circumstances. Since regional trade liberalization is both discrimination and liberalization, its implications are profoundly ambiguous. Liberalizing on a regional basis means liberalizing on a discriminatory basis. Therein lays the two-sided nature of regionalism. The “liberalization” part in “discriminatory liberalization” is generally good since it removes artificial barriers between domestic and some foreign producers. The “discrimination” part, by contrast, is generally bad since it creates new barriers between various foreign producers. Plainly then, one cannot know whether regionalism helps or hinders multilateralism based on pure logic. This brings us to the state of the debate. The key risks of regionalism is that regional liberalization is a substitute for multilateral liberation and regionalism shifts power in worrying directions specifically it fosters greater dominance of small nations by hegemonic powers, and it increases the chances of inter-bloc trade war. The regionalism-is-a stumbling- bloc school focuses on the discrimination. The regionalism-is-a-building bloc school focuses on the liberalization. Reciprocal liberalization of most kinds tends to strengthen pro-trade political economy forces while at the same time weakening the anti-trade political economy forces, and this within each of the participating nations. Fascism is...
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...Regional Analysis of NAFTA January 1, 1994, the United States, Canada, and Mexico entered a trade agreement which removed restrictions on trade between the three countries to encourage free competition, improve investment opportunities, and increase market access. NAFTA has provided some advantages to its members such as the eradication of tariffs, product price reductions, and increased profit margins. By reducing the tariff rate on goods or products, this allows Small and Medium Enterprises (SMEs) to reduce their selling price, thus keeping them competitive with non-NAFTA goods and products sold at a higher price due to imposed tariffs. This also allows SMEs to compete with larger organizations within the regions. Regional integration is a formation of closer economic relations among countries that are geographically in the vicinity of one another, especially forming preferential trade agreements. However, as we can see, regional integration also refers to an outcome, which occurs when present criteria are met. Around the globe, we have seen an increase in the number and depth of regional integration over the last few decades. Over 40% of world trade occurs within regional integration agreements such as the European community, NAFTA, and new or expanded agreements continue to be negotiated (Wayne, 2004). A regional integration agreement represents free trade to the extent that it results in trade creation. This occurs by shifting the production of some good or product...
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...Journal of International Commercial Law and Technology Vol. 5, Issue 3 (2010) The role of South Africa in SADC regional integration: the making or braking of the organization∗ Saurombe Amos University of South Africa Sauroa@unisa.ac.za Abstract. The economic and political strength of South Africa in Southern Africa is undeniable. South Africa is the strongest economy in Southern Africa and in the whole continent of Africa. Regional and global interests lie at the heart of South African’s foreign policy resulting in the need to create compromises that may disadvantage the SADC block. South Africa is the current chair of SADC and its leadership role is critical. The country is also the gateway to foreign direct investment to the developing world. This paper seeks to discuss the critical position which South Africa finds itself in. The challenge to provide leadership at regional and global level has also been compounded by the domestic outcry for a need to deal with issues at home. South Africa holds the key for the success of SADC both at economic and political levels. However SADC’s dependence on South Africa may turn out to be a stumbling block since there is divided attention. This has been shown by South Africa’s ‘go it alone’ approach when it comes to negotiating trade agreements, e.g. with the EU, as well as its unwillingness to compromise on the Economic Partnership Agreements (EPAs) that the other SADC Members States are signing. What is obvious is that SADC needs...
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