Countries Working Together… Regional Groups

Globalization The movement toward interdependence of markets Countries becoming more connected Made possible because of advances in communication and development of Internet Result of connecting economies of many nations is increased competition and more opportunities McDonald’s in Japan

Inter-governmental Organizations (IGOs) Today there are more than 250 IGOs IGOs are formed by a treaty between two or more countries Members are nations, not individuals Formed to support a common interest… could be political, economic or to provide a neutral setting to solve conflicts

What is an IGO? An created by treaty or agreement between states. It has international legal status (privileges, rights, immunities and duties) based on a founding charter or statute. An IGO can enter into agreements with other IGOs or with states.  IGOs usually have a legislative body which create legal acts (decisions, resolutions) and which may be part of international law. Most of the legislative acts do not supersede national law (except in the EU).  IGOs may have a body which is empowered to resolve disputes among member states.  IGOs may have an executive body or secretariat which oversees the operations of the IGO.

Four Types of IGOs 1. World wide organizations… UN 2. Regional organizations… EU, OAS, AU 3. Groups based on culture, language or history… Commonwealth of Nations, La Francophonie, Community of Portuguese Language Countries 4. Economic organizations… could focus on free trade, development, or a particular resource… OPEC, Bank of the South

Reasons to join an IGO 1. economic benefits… regional trade blocs, better trade terms or greater access to a market—fewer barriers to trade among members 2. political influence… small countries gain more influence as member of a smaller group 3. security benefits… helps to solve disagreements or provide security (NATO) 4. improve democracy… generally countries move more toward democracy and governments become more stable and last longer  

Why countries would not want to join an IGO 1. loss of sovereignty… can't always have it "your" way… treaties require cooperation among members 2. benefits are not as great as expected or wanted so there is no point to joining

Examples of IGOs 1. Commonwealth of Nations 2. NATO 3. Asia-Pacific Economic Cooperation 3. African Union 4. Organization of American States 5. Organization of Ibero-American States 6. Association of Southeast Asian Nations 7. East Asia Summit 8. Gulf Cooperation Council 9. European Union 10. European Free Trade Association

An IGO is not an NGO A Non-governmental Organization (NGO) is different from an IGO NGO… transnational org. of private citizens. The World Bank defines NGOs as "private organizations that pursue activities to relieve suffering, promote the interests of the poor, protect the environment, provide basic social services, or undertake community development."  It is a private or non-profit organization independent from national or local government.

Regional Blocs It is a type of IGO… Most common regional bloc is a trade bloc Many blocs were formed in the 1960s and 1970s By 1997, more than 50% of world trade was conducted through trade blocs Members of successful trade blocs share similar characteristics… (a) similar levels per capita GDP (b) close to each other geographically (c) similar or compatible trading structures (d) political commitment to regional blocs

Purpose of a regional trade bloc preferential trade among members promote regional security promote political goals

Advantages of joining a Regional Trade Bloc preferential trade terms with other members— reduced barriers, lower tariffs create growth for each member country cheaper products for consumers economic prosperity political stability multilateral trade agreements are easier to negotiate stimulate economic growth & prosperity—leads to better standard of living

Disadvantage of Regional Trade Blocs Some people believe regional trade blocs divide the world into hostile trade groups Regional trade blocs inhibit global free trade Reduces competition Keeps standard of living from rising as high as it could for individual countries

Types of Trade Blocs Free trade area… preferential trade to reduce or remove tariff barriers to trade among members. Barriers to trade with non-members vary among the members… NAFTA Customs union… eliminate trade barriers among members. Have common trade barriers against nonmembers… EU Common market… same as a customs union; adds free movement of goods & services, labor and capital among members… EU Economic union… besides trade, social, tax, monetary, fiscal policies are unified… EU (the Euro)

Examples of Regional Trade Blocs Union of South American Nations Caribbean Community Central American Integration System Arab League Association of Southeast Asian Nations Central European Free Trade Agreement NAFTA Pacific Islands Forum Mercosur (Argentina, Brazil, Paraguay, Uruguay)… Southern Cone Common Market

Sources http://en.wikipedia.org/wiki/Globalization http://ucatlas.ucsc.edu/trade/subtheme_trade_blocs.php http://www.ces.ncsu.edu/depts/agecon/trade/eight.html http://www.taipeitimes.com/News/world/archives/2010/07/07/2003477272/1 http://hdr.undp.org/external/HDR_papers/oc2c.htm  http://plato.stanford.edu/entries/globalization/ http://www.investorwords.com/2182/globalization.html http://www.libsci.sc.edu/bob/IGOs.htm contains list of IGOs and their websites (after list of UN agencies) http://intergovernmental.org/