Economic Alliances FrancisciWG.9bc

Economic Alliances Why is it important for a country to join an economic alliance? Membership into an economic alliances provides access to global trade markets!

Examples of Economic Unions: European Union (EU): 1.Economic alliance created after WWII. 2.Consists of 28 European Nations. 3.Created to reduce trade barriers among members and promote cooperation between countries.

Examples of Economic Unions: North American Free Trade Agreement (NAFTA): 1.Economic alliance formed in 1989 between the U.S., Mexico and Canada. 2.Created to eliminate barriers to free trade such as the movement of goods and services across the countries.

Examples of Economic Unions: ASEAN: 1. Economic Organization established in 1976 between Southeast Asian countries. 2. Created to accelerate economic growth, social progress and peace and stability.

Examples of Economic Unions: Organization of Petroleum Exporting Countries (OPEC): 1.Economic alliance established in Members include Middle Eastern, Southwest and North African countries. 3.Exists to manipulate the supply of oil so that prices remain regulated in favor of oil producing countries.

Advantages of Economic Unions: Members cooperate Have better access to one another’s technology Access to larger markets (global market) Access to natural, human and capital resources without restrictions among the members Greater influence in the world Powerful unity if trading as a single country

Disadvantages of Economic Unions: Can result in the closing of some industries Concentration of the same industries in certain countries while surrounding countries are excluded Large agricultural companies (agribusiness) will often replace family farms Member countries may disagree on certain economic policies such as setting prices, etc.

How Economic Interactions have changed over time: Cottage Industries: A home or village-based industry in which family members supply their own equipment to make goods Factory, office and telecommunications Industrialized countries send labor intensive work to developing countries Growth of trade alliances

How Economic Interactions have changed over time: Growth of tertiary industries Growth of international banks Product assembly (vehicles, electronic equipment) Technology (instant communication

How Economic Interactions have changed over time: Modern transportation networks that allow rapid and efficient exchange of goods and materials (Federal Express, U.S. Postal Service) Widespread marketing of products (Fuji film, Nike)