Economic Integration. Countries regional economic association Market integration and enhanced competition by trade liberalization.

Slides:



Advertisements
Similar presentations
1 Lectures 23-28: Trade Policy and Integration What: instruments of trade policy How: effects of trade policy Why: arguments against free trade New: economic.
Advertisements

THE THEORY OF COMMON MARKET
Dr. jur. Tatjana Evas Tallinn Law School 2014
Trade Agreement Preferential Trade Agreement (PTA) Custom Union Economic Analysis of PTA/CU.
Regional Economic Integration. Introduction  Regional economic integration is the political and economic integration among countries that give preference.
International Trade Policy Economic Integration and Regionalism.
3.4 Economic Integration Pages Print pages 1,3,5-9.
التكتلات السياسية والإقتصادية العالمية والإقليمية
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Regional Economic Integration.
Regional Economic Integration Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall.
Chapter 8 Economic Integration.
8-1 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Cross-National Cooperation and Agreements.
Chapter 9 -- Preferential Trading Arrangements INTERNATIONAL ECONOMICS, ECO 486 Nearly all of the 130 WTO member countries belong to one (or more) of the.
Trade Blocs.
International Business 9e
© 2014 Cengage Learning. All rights reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
Developed by Cool Pictures & MultiMedia PresentationsCopyright © 2004 by South-Western, a division of Thomson Learning. All rights reserved. The Economic.
TRADING BLOCKS.
Copyright © 2007 by South-Western, a division of Thomson Learning. All rights reserved. The Economic Environment Chapter 4.
Essential Question Should Europe abandon the Euro? Slide 20-1Copyright © 2003 Pearson Education, Inc.
Lecture 8 WORLD TRADING PATTERNS. International trade is exchange of capital, goods and services across international borders or territories. In most.
International Economics Tenth Edition
Regional Economic Integration
Trade Theories and Economic Development
Outline for 11/5: International Integration Concepts defined Steps in international integration Why integrate? Deepening vs. Widening (Again) Non-Governmental.
1 Chapter 8 Economic Integration. 2 Learning Objectives To review types of economic integration among countries To examine the costs and benefits of integrative.
International Economics International Economics Tenth Edition Economic Integration: Customs Unions and Free Trade Areas Dominick Salvatore John Wiley &
Chapter 9 Economic Integration.
The Global Economic Environment Global Marketing.
广东省省级精品课程《国际贸易》 Chapter 12 Economic Integration 广东外语外贸大学国际经贸学院 卢立岩 副教授.
8-1 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall International Business Part Three Theories and Institutions: Trade and Investment.
Euro 312 Presentation Is EU integration model suitable for the South Asian Association for Regional Co-operation (SAARC)? By William Lama 9 th June 2006.
Regional Economic Integration. © Prentice Hall, 2006International Business 3e Chapter Chapter Preview Define each level of regional integration.
CHAPTER 10 Regional Trading Arrangements. 2 Types of regional trading arrangements Free-Trade Area — all members of the group remove tariffs on each other’s.
Department of Foreign Trade Ministry of Commerce, Trade & Industry.
Section IV Trade Creation and Trade Diversion. Trade Creation  The Trade creation effect refers to the increased output by members of a trade block as.
International Trade. Benefits of trade International trade: exchange of goods and services across international boundaries. Countries trade with each.
1 Regional Integration Regional trade agreements (RTAs) References Hill, C W “International Business” (6th edit., 2007), Chapter 9 Ball, D et al. “International.
Regional Economic Integration. Introduction Regional economic integration refers to agreements between countries in a geographic region to reduce tariff.
1 An Introduction to International Economics Second Edition Economic Integration Dominick Salvatore John Wiley & Sons, Inc. CHAPTER S E V E N.
Economic Integration Definition: economic cooperation between countries and co-ordination of their economic policies, leading to increased economic links.
Topic 4: Economic Integration.  Economic integration  Economic integration is defined as the coming together of countries with the goal of increasing.
Economic Integration Chapter 3
COMMENTS & RECOMMENDATIONS ON THE CORPORATE COMPETITIVENESS IN FREE TRADE AGREEMENT (FTA) ERA. AJBM 31 st MEETING BANGKOK, THAILAND, NOVEMBER 24, 2005.
Regional Integration: Implications for Agriculture in South- Eastern Europe Garry Christensen.
3.4 Economic Integration. Economic Integration What is economic integration? Preferential trade agreements Trading blocs Monetary unions.
© 2014 by McGraw-Hill Education. This is proprietary material solely for authorized instructor use. Not authorized for sale or distribution in any manner.
C OUNTRIES W ORKING T OGETHER … R EGIONAL G ROUPS.
ECONOMIC INTEGRATION Subtitle. TITLE AND CONTENT LAYOUT WITH LIST Add your first bullet point here Add your second bullet point here Add your third bullet.
AdvantageDisadvantage 1 st Free Trade Area 2 nd Customs Union 3 rd Single Market 4 th Economic Union 5 th Monetary Union.
 Some countries create business opportunities for themselves their economies in order to avoid unnecessary competition among the group countries.  It.
Regional Economic Integration
Introduction to Global Business
International Economic integration (Cooperation)
Countries Working Together… Regional Groups
Advantage Disadvantage
Chapter 8 Regional Economic Integration
Regional Economic Integration
ECONOMIC POLICY.
International Economics Tenth Edition
Study Unit 6 Ms. K Amusa.
POSSIBLE GAINS FROM THE FORMATION OF A CUSTOMS UNION
Chapter 10: Economic Integration
NS3040 Fall Term 2018 Theory of Economic Integration
Chapter 8 Economic Integration.
Cross-National Cooperation and Agreements
Regional Economic Integration
ECONOMIC POLICY.
Regional Economic Integration
Economic Integration AP/IB Economics.
Presentation transcript:

Economic Integration

Countries regional economic association Market integration and enhanced competition by trade liberalization

Forms of economic integration: 1) Free Trade Area (FTA) -Free trade between the members 2) Custom Union (CU) -FTA + common external tariffs (CET) on trade with non-members 3) Common Market (CM) - CU + free mobility of factors of production 4) Economic Union (EU) - CM + common economic policy

Schematic presentation of economic integration schemes Schematic presentation of economic integration schemes SCHEMEFree intra- scheme trade Common commercial policy Free factor mobility Common monetary and fiscal policy One government Free trade areaYesNo Customs unionYes No Common marketYes No Economic unionYes No Complete economic & political integration Yes 1.2 Co-ordination and harmonisation: a set of intervention policies 1.2 Co-ordination and harmonisation: a set of intervention policies

External economies (maximize the gains) External diseconomies (minimize the losses) The members adopt either cooperative policies (internalize the externalities- advance economic integration) or non- cooperative policies (looser form of integration- FTA)

The process of economic integration Integration increases the interdependence between the members increases the need for cooperation is intensified. During the economic integration the member states voluntarily choose to restrict/ replace their national objectives and policies and undertake it in a common level of union. Integration is a process during which the sovereign power of the member states is progressively diminished.

The objectives of economic integration Association between states aim at the realization of a benefit All economic associations always have positive and negative economic implications trade liberalization and enhanced competition in an enlarged market. The objectives of the union can be reached efficiently only with the sacrifice of national sovereignty in order to achieve a collective goal.

Economic integration between developed countries 1.The essential requirements for an increasing economic integration are: –Comparable levels of economic development; –Similar but potentially complementary structures in production and demand; There are static effects (immediate general benefits) and dynamic effects (accelerate development and raise welfare). The economic integration will stimulate research and development, inducing innovation and technical change faster economic growth.

Integration among developing countries The economic integration is not based on static benefits, it aims at the potential dynamic effects and the expectation that closer cooperation will foster regional markets. The objective of their integration is the acceleration of their development by: –enlarging the market –pooling resources essential for economic growth –Avoiding unnecessary and uneconomic duplication in capital investment Integration between developing countries contains also elements of self-destruction, for that reason the economic association rarely survive for a long time. –Example: East Africa Common Market (EACM), Central American Common Market (CACM).