Upgrade to remove ads
Chapter 9 Regional Economic Integration
Terms in this set (25)
REgional economic integration
agreements between countries in a geographic region to reduce tariff and non tariff barriers to the free flow of goods, services, and factors of production between each other
free trade area
eliminates all barriers to the trade of goods and services among member countries (EFTA, NAFTA)
eliminates trade barriers between member countries and adopts a common external trade policy
has no barriers to trade between member countries , a common external trade policy and the free movement of the factors of production and labor
What are the levels of regional economic integration?
Free trade area, customs union, common market, economic union,
the free flow of products and factors of production between members, a common external trade policy a common curency , a harmonized tax ate, and a common monetary and fiscal policy (EU)
involves a central political apparatus that coordinates the economic, social, and foreign policy of member states
Why should countries integrate their economies?
1All countries gain from free trade and investment
2 countries become more dependent on each other, less conflict
What limits eforts at integration?
Economic integration can be difficult because while a nation as a whole may therefrom a regional free trade agreement certain groups may lose it implies a loss of national sovereignty
Regional economic integration is only beneficial if the amount of trade it creates exceeds the amount it diverts
occurs when low cost producers within frthe free trade area replace high cost domestic producers
occurs when higher cost suppliers within the free trade area replace lower cost external suppliers
European has two trade blocs
EU with 27 members
European Free trade area EFTAwith 4 members
TReaty of rome?
the European economic community was formed by them with the goal of becoming a common market
Single European Act
committed the EC countries to work toward establishment of a single market by december 31 1992
was born out of frustration among ec memebrs that the community was not living up to its promise
Provided the impetus for the restructuring of substantial sections of european industry allowing for even faster economic growth.
The main institution in the European Union
European council, european commission, european parliament, court of justice
the ultimate controlling authority iwhthin the EU
responsible for propsing eu legislation implementing it and monitoring compliance with EU laws by member states
Debates legislation proposed by the commission and forwarded to it by the council
Court of Jusice
the supreme appeals court for EU law
committed the EU to adopt a single currency ( created the second largest currency zone in the world after that of the U.S. dollar)
benefits of the euro
savings from having to handle one currency
2. it is easier to compare prices across europe so firms are forced to be more competitive
3. gives a strong boost to the development of highly liquid pan European capital market
4. increases the range of investment options open both to individuals and institutions
Costs of the Euro
loss of control over national monetary policy
EU is not an optimal currency area
Should the EU continue to expand?
many countries have applied for EU membership.
Ten countries joined in 2004 expanding the EU to 25 states
In 200, Bulgaria and Romania joined
Turkey has been denied over concerns of human rights.
What is the STatus of Economic Integration in the Americas?
There is a move toward a greater regional economic integration in the Americas
NAFTA is the biggest effort
Other efforts include the andean community and MERCOSUR
Hemisphere wide free trade of the Americas is under discussion
Norht American Free Trade ARea
abolishes tariffs on 99% of the good traded between memebrs
2 removed barriers on teh cross border flow of services
3 protects intellectual property rights
THIS SET IS OFTEN IN FOLDERS WITH...
Chapter 6: International Trade Theory
Ch 11 The International Monetary System
Chapter 8 - Foreign Direct Investment
Chapter 7 Government Policy and International Trade
YOU MIGHT ALSO LIKE...
IBUS chap 9
International Business Chapter 8
357 midterm #2 - Ch. 9
OTHER SETS BY THIS CREATOR
Fundamentals Concept and Network Models| 115
Chapter 6 189
OTHER QUIZLET SETS
Lecture 2 - Regional Economic Integration
Chapter 8 IB