...Regional Economic Integration Learning objectives • Be able to explain the different levels of regional economic integration. • Understand the economic and political arguments for regional economic integration. • Understand the economic and political arguments against regional economic integration. • Be familiar with the history, current scope, and future prospects of the world’s most important regional economic agreements. • Understand the implications for business that are inherent in regional economic integrations agreements. This chapter discusses regional economic integration, agreements among countries within a geographic region to achieve economic gains from the free flow of trade and investment among themselves. There are five levels of economic integration. In order of increasing integration, they include free trade area, customs union, common market, economic union, and full political union. Integration is not easily achieved or sustained. Although integration brings benefits to the majority, it is never without costs for the minority. Concerns over sovereignty often slow or stop integration attempts. The creation of single markets in the EU and North America means that many markets that were formerly protected from foreign competition are now more open. This creates major investment and export opportunities for firms within and outside these regions. The free movement of goods across borders...
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...trade barriers, for example protecting intellectrual property rights, patents, trademarks, and copyrights, but it is difficult to protect them from unscrupulous business from other countries. 6. NTBs In recent years, however, the United States-as well as most countries world-wide, has established bilateral or multilateral free-trade agreements (FTAs) between two or more countries to eliminate tariff and non-tariff barriers affecting trade among themselves. 7. Portfolio Investment It is a non-controlling interest in a venture made in the form of either debt or equity. 8. SMEs It benefits from the tariff-eliminating provisions of free trade agreements, and should benefit from the significant tariff cuts required under the CAFTA-DR. The transparency obligations, particularly those contained in the customs chapters, are also very important to SMEs, which may not have the resources to navigate customs and regulatory red tape. 9. Joint venture On form of merger is a joint venture, a direct investment in which two or more partners share ownership. 10. G7 Finance ministers met in Rome in February 2009 to affirm their pledges to avoid resorting to protectionism as they try to stimulate their own economies in the face of the world’s worst economic crisis since the depression era of the 1930s....
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...BLC Essay 2 Isidro Morales describes US trade policies towards Latin America as a ‘neo-liberal corporate-led agenda’. Discuss the validity of his claim, as well as the desirability of extending the model of regional integration preferred by Washington to all of the Americas. “Since trade ignores national boundaries and the manufacturer insists on having the world as a market, the flag of his nation must follow him, and the doors of the nations which are closed against him must be battered down. Concessions obtained by financiers must be safeguarded by ministers of state, even if the sovereignty of unwilling nations be outraged in the process. Colonies must be obtained or planted, in order that no useful corner of the world may be overlooked or left unused.” Woodrow Wilson, President of the United States, 1919 Madalina Daniela Costache Robert Ibsen British and American Studies – 2XBF November 8th 2013 Number of words: 938 With the emergence of the Washington consensus, the US foreign policy shifted towards a neoliberal model in order to deal with the pressures incited by globalization. Neoliberal theory argues for the development of a free market economy where there is a high degree of free individual choice, and which achieves efficient economic performance by reducing the state’s intervention solely to “defining property rights, enforcing contracts, and regulating the money supply” (Kotz 2000). This essay argues that, as Morales claims, the US does pursue a...
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...Partnership: Worse than NAFTA? Septemb er 2013 Lori Walla ch Public Citizen’s Global Trade Watch Outcomes of 20 Ye ars of NAFTA, WTO, FTAs… Crushing of Americ an Middle Class: more than 5 million US manufa cturing jobs (1 out of 4) & 60,000 US manufa cturing fa cilities gone. Millions of service sector jobs offshored: c all centers, computer, programming, engineering, a cc ounting. Wage “arbitrage” in a ra ce- to-the- bottom. U.S. re al median wages at ‘70s levels. Income inequality at Robb er-Baron-era levels. When manufa cturing, good jobs go tax bases shrink – and schools, public services, infrastructure cut, and construction sector unemployment soars. Floods of unsafe imported food, products. Financial deregulation, instability and repe ated financial crises. He alth, labor, land use, other public interest laws around world atta cked in foreign tribunals. Some dump ed. Initiatives chilled. Billions extra cted from taxpayers and paid to corporations for violations of new “rights.” Drug prices up. In poor nations, de adly cut in a cce ss to meds. Rich nation higher prices slam poor consumers, govt budg ets as Big PhRMA profits soar. U.S. loses 170,000 family farms. In ‘12, volume of U.S. food exports only 1% higher than ’95 (when NAFTA-WTO started). Imports of food now 97% above ‘95 level. Livelihoods of tens of millions of pe asant farmers destroyed, mass migrations, hunger incre ased. Growth rates decline in nations that follow NAFTA-WTO model. U...
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...* Quizzes Home * Summary * Submissions Selected * Reports ------------------------------------------------- Top of Form Xiaoshu Zhang (username: xzhang2) | To Submissions ------------------------------------------------- Attempt 1 Written: Mar 3, 2012 1:28 AM - Mar 3, 2012 1:57 AM ------------------------------------------------- Submission View Your quiz has been submitted successfully. Quiz 8 Chapters 19 and 20 | Question 1 | | 1 / 1 point | Critics charge that intermediaries ________. | | are too few in number | | | are inefficient | | | provide only necessary services | | | underprice their services | | | are too competitive | Question 2 | | 1 / 1 point | ________ calls for meeting the present needs of consumers and businesses while also preserving or enhancing the ability of future generations to meet their needs. | | The sustainable marketing concept | | | Innovation | | | Consumerism | | | Environmentalism | | | The strategic planning concept | Question 3 | | 1 / 1 point | What are deficient products? | | products that have neither immediate appeal nor long-run benefits | | | products that give high immediate satisfaction but only hurt consumers in the long run | | | products that have low appeal but may benefit consumers in the long run | | | products that are either unsafe or inferior | | | any product in the decline stage of the product life cycle | Question 4 |...
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...Free Trade Agreement (CAFTA) is the most recent free trade agreement incorporated with a foreign nation. The countries in the agreement include the Dominican Republic, Costa Rica, Guatemala, Honduras, Nicaragua, and also El Salvador. Originally the United States government created policy that gave these nations a reasonably open right of entry to U.S. markets for their goods, but they still protected their own markets through trade barriers as well as tariffs. The U.S. was restricted access with these nations’ trade policies in their markets for U.S. goods and services. CAFTA first and foremost almost completely eliminated 80% of tariffs on U.S. manufactured goods and will remove them entirely over a few years. The agreement covers not just goods, but any type of exchange between the United States and any of the nations. A huge benefit from the agreement for the Dominican Republic and Central America is that there will be an increased amount of examining environmental security as well as regulatory principles. I believe overall that this trade agreement will be a positive and beneficial addition to our trade policy. It will help us open new markets as well as give us opportunities to improve our overall economy. I’m going to examine the supporters as well as the opponent’s views on the agreement, talk about our own states senators and house members and how they voted on the agreement, and also give my own thoughts on the strengths and weaknesses of CAFTA. I will also talk about...
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...Chapter EIGHT CROSS-NATIONAL COOPERATION AND AGREEMENTS OBJECTIVES • To profile the World Trade Organization • To discuss the pros and cons of global, bilateral, and regional integration • To describe the static and dynamic effects and the trade creation and diversion effects of bilateral and regional economic integration • To define different forms of regional economic integration • To present different regional trading groups, such as the European Union (EU), the North American Free Trade Agreement (NAFTA), and Asia-Pacific Economic Cooperation (APEC) • To describe the rationale for and success of commodity agreements Chapter Overview Regional economic integration represents a relatively new phenomenon in the history of world trade and investment. Chapter Eight first examines the roles of the General Agreement on Tariffs and Trade and the World Trade Organization in determining the ground rules of the world trade environment. It then introduces the basic types of economic integration and explores the potential effects of the process. Next it examines in detail both the European Union (its structure and its operations) and the North American Free Trade Agreement and briefly describes a variety of other regional economic groups. The chapter concludes with a discussion of various commodity agreements and producer alliances, including the Organization for Petroleum Exporting Countries. Chapter Outline OPENING CASE: TOYOTA IN EUROPE Known for...
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...------------------------------------------------- Free Trade Area of the Americas From Wikipedia, the free encyclopedia The Free Trade Area of the Americas logo The Free Trade Area of the Americas (FTAA) (Spanish: Área de Libre Comercio de América [ALCA], French: Zone de libre-échange de Amérique [ZLÉA],Portuguese: Área de Livre Comércio das Américas [ALCA], Dutch: Vrijhandelszone van Amerika) was a proposed agreement to eliminate or reduce the trade barriers among all countries in the Americas excluding Cuba. In the latest round of negotiations, trade ministers from 34 countries met in Miami, United States, in November 2003 to discuss the proposal.[1] The proposed agreement was an extension of the North American Free Trade Agreement (NAFTA) between Canada, Mexico, and the United States. Opposing the proposal were Cuba, Venezuela, Bolivia, Ecuador, Dominica, Nicaragua and Honduras (all of which entered theBolivarian Alternative for the Americas in response), and Argentina, Chile and Brazil. Discussions have faltered over similar points as the Doha Development Round of World Trade Organization (WTO) talks; developed nations seek expanded trade inservices and increased intellectual property rights, while less developed nations seek an end to agricultural subsidies and free trade in agricultural goods. Similar to the WTO talks, Brazil has taken a leadership role among the less developed nations, while the United States has taken a similar role for the developed nations. Free...
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...Introduction The North American Free Trade Agreement, also referred to as NAFTA, was implemented on January 1, 1994. The free trade agreement, signed by Canada, Mexico and the United States, allows for trilateral trade (Export.gov). The agreement permits for the removal of trade barriers and tariffs, which paves the way for easier trading throughout the North American countries. The agreement calls “for the gradual elimination…of most remaining barriers to cross-border investment and to the movement of goods and services among [the United States, Canada and Mexico]” (CBP.gov). The implementation of NAFTA was preceded by CAFTA, which was a similar agreement solely between Canada and then United States (“Scott, Robert E.). Signed by President Bill Clinton, NAFTA had a goal to “[sweep] away export tariffs in several industries: agriculture [being] a main focus, [as well as] tariffs [being] reduced on items like textiles and automobiles” (Teslik, Lee Hudson). The primary goal of NAFTA is to ease restrictions on commerce between the three countries, in attempts to increase cross-border trade. The initial purposes are outlined specifically within the pages of agreement. Its original goals, along side with easing trade restrictions, include increasing investment opportunities for each country and their citizens. Each nation’s government desires to allow, for citizens of their own countries, the opportunity to invest and participate in the other North American economies. Another preliminary...
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...Chapter 15 GLOBAL OPPORTUNITIES Instructor ANAND TULADHAR Scribe NEHA KAYATSHA GEETA KHADKA 10th July, 2015 1. Explain why “going global” has become an integral part of many small companies’ marketing strategies. Companies that move into international business can reap many benefits, including offsetting sales declines in the domestic market; increasing sales and profits; extending their products’ life cycles; lowering manufacturing costs; improving competitive position; raising quality levels; and becoming more customer oriented. 2. Describe the principal strategies for going global. Perhaps the simplest and least expensive way for a small business to begin conducting business globally is to establish a site on the World Wide Web. Companies wanting to sell goods on the Web should establish a secure ordering and payment system for online customers. Trade intermediaries such as export management companies, export trading companies, manufacturer’s export agents, export merchants, resident buying offices, and foreign distributors can serve as a small company’s “export department.” In a domestic joint venture, two or more U.S. small companies form an alliance for the purpose of exporting their goods and services abroad. In a foreign joint venture, a domestic small business forms an alliance with a company in the target area. Some small businesses enter foreign markets by licensing businesses in other nations to use their patents...
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...American Economic Integration: NAFTA and Beyond Dr. Igor M. Paramonov, Southern Alberta Institute of Technology, Calgary, AB, Canada ABSTRACT This paper examines various possibilities for future economic integration within and beyond the North American Free Trade Agreement (NAFTA). Previous publications have suggested three potential trajectories including development within the envisioned original structure, deepening, and widening of NAFTA (Clement et al, 1999). It is necessary to revisit these directions while summarizing major developments and new perspectives. Vision and hard work are required for NAFTA to remain one of the most economically competitive regional trading arrangements in the world. In addition to NAFTA, each member nation has pursued its own plans to integrate with countries and regions beyond North America. The most recent developments involve trade negotiations between Canada and the European Union, as well as both Canada and Mexico’s considerations to join the nine countries of the Trans-Pacific Partnership Pact. The United States cooperates with a group of smaller developing economies within the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR). This paper presents ongoing analysis of governmental, academic, and other sources for the purpose of teaching in the field of international business, including the uncommon course of “Business under NAFTA.” INTRODUCTION Is the “Age of NAFTA” over? This is a legitimate...
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...Global Issue | Challenge (Yes or No) | Why is it a challenge | Cultural challenges | YES | Different countries vary * Tastes * Gestures * Treatment of people * Ethical issuesThis difference can significantly affect individuals and organizations involved in global trade. | Language challenges | YES | * International parties must agree on common language * Data not transmittable internationally because information must be translated; computers still cannot accurately translate on the fly * English considered de facto international language * Many countries require accounting systems to be in the local language | Time and distance challenges | YES | * Crafting policies that work for employees, customers, and IS for all time zones * Time stamping | Infrastructure challenges | YES | High-quality electricity and water might not be available in certain parts of the world. * Telephone services * Internet connections * skilled employeesmight be expensive or not readily available. | Currency challenges | YES | The value of different currencies can vary significantly over time, making international trade more difficult and complex | Product and service challenges | YES | Traditional products that are physical or tangible, such as a car or bicycle, can be difficult to deliver to the global market. However, electronic products (e-products) and electronic services (e-services) can be delivered to customers electronically, over the phone, networks...
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...The world trade organization is an organization can be looked at in a number of ways; firstly the WTO is an organization for trade opening; a forum where governments discuss trade agreements; and as platform for solving trade disputes. Further on, the WTO functions as a system of trade rules and as a place where member states sort out their trade issues among themselves. This organization was founded out of negotiations and its modus operandi is that of negotiation. Today, most of WTO’s current operations stem from the Uruguay Round as well as other negotiations under the General Agreement on Tariffs and Trade (GATT). It is currently hosting the new negotiations that were birthed from the “Doha Development Agenda” of 2001 (Wto.org,. 2014). Where states have been confronted with trade barriers and want them lowered, deliberations at the WTO have facilitated opening of markets for trade. In conjunction, the WTO is not only about opening of new markets, it also supports maintenance of trade barriers- for instance where consumer rights are threatened or to prevent harm to the consumers. At the core of WTO are the agreements that have been negotiated and sealed by the majority of the world’s trading states. These agreements present the legal guidelines for international trade. They are in essence contracts that bind governments to maintain their trading rules within the set limits (Wto.org,. 2014).. While they are signed and negotiated by states, the aim remains to help the providers...
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...* Outcome1 * * 1.Free trade is a policy followed by some international markets in which countries' governments do not restrict imports from, or exports to, other countries. * For example, CAFTA is a free trade area involve China and other 10 ASEAN country, January 1, 2010, the trade zone was officially launched. After the completion of the FTA, ASEAN and China's trade accounted for 13% of the world trade, becoming a huge economy covering 11 countries, 1900000000 population, GDP amounted to $6000000000000, is currently the world's largest population of free trade zone, but also the largest FTA among developing countries.To create an economic zone with 1800000000 consumers, nearly $2000000000000 gross domestic product, $1.2 trade volume. * In economics, the principle of absolute advantage refers to the ability of a party (an individual, or firm, or country) to produce a greater quantity of a good, product, or service than competitors, using the same amount of resources. The principle of comparative advantage refers to the advanced level of a kind of innovation and the replacement of the old technology. * For example: * A have an hour to write 100 software or rub 200 pieces of glass. * B have an hour to write 50 software or rub 20 glass * A is stronger than B in each aspect, so that A has absolute advantage. However, B has more advantages in writing software because the efficiency of the glass is even worse, so B has comparative advantage in writing software...
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...subject to some trade agreements. In these procurements, end products and construction materials from specific countries receive nondiscriminatory treatment in evaluation with domestic offers. In most cases, the dollar value of the procurement determines which of the trade agreements apply. The BAA appears to control most procurements of the federal government but may be controlled by other legislation or international agreement. The Trade Agreement Act of 1979 authorizes the President to waive any otherwise applicable law, regulation, or procedure regarding Government procurement that would accord foreign products less favorable treatment than that given to domestic products. Article 1004 of the North American Free Trade Agreement (NAFTA) disallows domestic protection legislation. These limitations on the application of the act must be considered when reviewing any Buy American issues. The test to determine the country of origin for an end product under the BAA is different than the test to determine the country of origin for an end product under the trade agreement, or the criteria for the...
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