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Regions and Market Groups
Multinational Market Regions and Market Groups
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Multinational Market Regions and Market Groups
I. Patterns of Multinational Cooperation 1) Regional Cooperation Groups 2) Free Trade Area 3) Customs Union 4) Common Market 5) Political Union
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The European Economic Area: EU, EFTA, and Associates
ICELAND EU EFTA NORWAY SWEDEN EC Associated FINLAND ATLANTIC OCEAN Netherlands DENMARK UNITED KINGDOM IRELAND GERMANY BELGIUM Austria FRANCE Switz. ITALY Portugal SPAIN TURKEY MALTA GREECE
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II. Europe 1) European Union a) Implications for European Firms
- Lower transaction/transport costs - Economies of Scale in production - Gains from competition b) Free Expansion to Other European Markets - Access to > 370 million consumers - Flexible production - Harmonization of laws/standards
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A Comparison of the EU and NAFTA
Population GNP Imports** Exports** ($ millions)* (per capita)* ($ millions) ($ millions) 10-7 EU* $ 8, ,899, ,927,914 NAFTA , ,014, ,536 * Includes 15 Countries. **Includes intra-member trade. SOURCES: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August 27, 1997; and International Marketing Data and Statistics, 1997 (London: Euromonitor, 1997). Irwin/McGraw-Hill
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2) EFTA 3) CEFTA c) European Union Implications for U.S. Firms
- Easier access to European markets - Potential growth in demand for U.S. products - Increased competition - Fears of “Fortress Europe” Marketing Mix Implications of EU 2) EFTA 3) CEFTA
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European Court of Justice
EC Institutions European Commission Council of Ministries European Parliament European Court of Justice
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Commonwealth of Independent States
ARCTIC OCEAN BELARUS MOLDOVA 10-10 UKRAINE RUSSIAN REPUBLIC GEORGIA ARMENIA AZERBAIJAN KAZAKHSTAN UZBEKISTAN Twelve republics, each with their own legislatures Twenty smaller “autonomous republic” or homelands for various ethnic groups TURKMENISTAN KYRGYZSTAN TAJIKISTAN Irwin/McGraw-Hill
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Central European Free-Trade Area (CEFTA)
Poland Hungary Slovakia Czech Republic Slovenia Romania 10-11 Irwin/McGraw-Hill
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North American Free-Trade Area (NAFTA)
Canada 10-12 United States Mexico Irwin/McGraw-Hill
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North American Free-Trade Area Provisions
Market Access Non Tariff Barriers Rules of Origin Customs Administration Investment Services Intellectual Property Standards Government Procurement 10-13 Irwin/McGraw-Hill
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NAFTA Rules of Origin Rule Type Description
Tariff shift rule Non-NAFTA imports undergo sufficient manufacture or processing to become products that can qualify under a different tariff classification. Value-content rule A set percentage of the value of the good must be North American (usually coupled with a tariff classification shift requirement) Some goods are subject to the value-content rule only when they fail to pass the tariff classification test because of non-NAFTA inputs. 10-14 * A complete description of the rules of origin can be found at (select NAFTA Rules of Origin and Customs Information). Irwin/McGraw-Hill
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Southern Cone Free Trade Area (Mercosur)
Argentina Bolivia Brazil Chile Paraguay Uruguay 10-15 Irwin/McGraw-Hill
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Latin American Integration Association (LAIA)
Argentina Mexico Bolivia Paraguay Brazil Peru Chile Uruguay Columbia Venezuela Ecuador 10-16 Irwin/McGraw-Hill
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Andean Common Market (ANCOM)
Bolivia Columbia 10-17 Ecuador Peru Venezuela Panama (Assoc.) Irwin/McGraw-Hill
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Caribbean Community and Common Market (CARICOM)
Antigua Montserrat Barbuda St. Kitts-Nevis Belize Anguilla Dominica St. Lucia Grenada St. Vincent Guyana Trinidad-Tobago Jamaica 10-18 Irwin/McGraw-Hill
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Central America Common Market (CACM)
Guatemala 10-19 Costa Rica Nicaragua Honduras Irwin/McGraw-Hill
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The Future • NAFTA • SAFTA ??? • FTAA ??? 10-20 Irwin/McGraw-Hill
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Association of Southeast Asian Nations (ASEAN)
Brunei Philippines Indonesia Singapore Laos Thailand Malaysia Vietnam Myanmar 10-21 Irwin/McGraw-Hill
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ASEAN + 3 • Brunei • Singapore • Laos • Vietnam • Malaysia China
• Indonesia • Thailand • Laos • Vietnam • Malaysia China • Myanmar Japan • Philippines South Korea 10-22 Irwin/McGraw-Hill
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Comparison of Exports Among Members of APEC and the EC
Population, 1989 Exports, 1990 Exports, 1995 GNP, 1996 (millions) (U.S. $ millions) (U.S. $ millions) (U.S. $ billions) APEC 2, , ,097 22,952 Americas* , ,085 7,989 Asia , ,901 6,447 Oceania 22 26,928 34, EC , ,606 8,180 10-23 *includes: U.S., Canada, Mexico, and Chile. SOURCES: IMF: International Financial Statistics, Direction of Trade; OECD: National Account, EC Committee: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August 27, 1997; and International Marketing Data and Statistics. 1997 (London: Euromonitor, 1997). Irwin/McGraw-Hill
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Economic Community of West African States (ECOWAS)
Benin Liberia Burkina Faso Mali Cote d’ Ivoire Mauritania Gambia Niger Ghana Nigeria Guinea Guinea-Bissau 10-24 Irwin/McGraw-Hill
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Southern African Development Community (SADC)
Angola South Africa Botswana Swaziland Lesotho Tanzania Namibia Zambia Malawi Zimbabwe Mauritius Mozambique 10-25 Irwin/McGraw-Hill
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Afro-Malagasy Economic Union
▶ Benin ▶ Gabon ▶ Burkina Faso ▶ Mali ▶ Cameroon ▶ Mauritania ▶ Central African Republic ▶ Niger ▶ Chad ▶ Senegal ▶ People’s Repub. of the Congo ▶ Togo ▶ Cote d’Ivoire 10-26 Irwin/McGraw-Hill
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East African Customs Union
▶ Ethiopia ▶ Tanzania ▶ Kenya ▶ Uganda ▶ Sudan ▶ Zambia 10-27 Irwin/McGraw-Hill
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Maghreb Economic Community
▶ Algeria ▶ Tunisia ▶ Libya ▶ Morocco 10-28 Irwin/McGraw-Hill
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Economic Community of West African States (ECOWAS)
▶ Benin ▶ Guinea-Bissau ▶ Burkina Faso ▶ Liberia ▶ Cote d’Ivoire ▶ Mali ▶ Gambia ▶ Mauritania ▶ Ghana ▶ Niger ▶ Guinea ▶ Nigeria 10-29 Irwin/McGraw-Hill
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West Africa Economic Community
▶ Senegal ▶ Mali ▶ Togo ▶ Mauritania ▶ Burkina Faso ▶ Niger ▶ Cote d’Ivoire ● Customs and Economic Union of Central Africa (CEUCA) ▶ Cameroon ▶ P. Rep. Of Congo ▶ C. Africa Repub. ▶ Gabon 10-30 Irwin/McGraw-Hill
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Customs and Economic Union of Central Africa (CEUCA)
▶ Cameroon ▶ P. Rep. Of Congo ▶ C. Africa Repub. ▶ Gabon 10-31 Irwin/McGraw-Hill
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Arab Common Market Iraq Kuwait Jordan Syria Egypt 10-32
Irwin/McGraw-Hill
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Economic Cooperation Organization (ECO)
Pakistan Iran 10-33 Turkey Azerbaijan Turkmenistan Uzbekistan Irwin/McGraw-Hill
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Future Multinational Trade Groups
United States/Japan Hong Kong/Taiwan/China Asia-Pacific Rim Countries Hong Kong/Taiwan/Coastal Provinces of Southern China Western Hemisphere Free Trade Area Transatlantic Free Trade Area (United States and European Union) 10-34 Irwin/McGraw-Hill
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