1. II. REGIONAL ECONOMIC INTEGRATION AND TRADE BARRIERS 1

2. TRADE RESTRICTIONS: COMMON BARRIERS TO TRADE TRADE RESTRICTIONS –Common Forms of Barriers Tariffs Subsidies Quotas Embargoes –Nontariff Barriers Exchange Controls Foreign Capital Controls

3. TRADE RESTRICTIONS REASONS FOR BARRIERS –Host Government’s View Protecting Importing firms Promoting import substitution Self sufficiency Encouraging local and FDI Promoting export-based growth Promoting infant industries

4. PROCESS OF INTEGRATION Regulated trade Free Trade Association Customs Union Common market Trade Union Complete economic integration 4

5. REGIONAL ECONOMIC INTEGRATION ECONOMIC INTEGRATION –Purpose

6. ECONOMIC INTEGRATION Most Important Examples Today: European Union (EU) North American Free Trade Association (NAFTA) World Trade Organization (WTO)

7. EUROPEAN UNION 7

8. Political EU Parliament – Currently 785 MEPs. Based in France, Belgium and Luxembourg Passes laws, monitors budget, monitors EU institutions EU Council Ministerial representations from each member state Passes laws, approves EU budget, co-ordination of economic policies, develops foreign policy, co-ordinates anti-crime strategies EU Commission 20 Commissioners appointed by each member state every 5 years Proposes legislation, Implements EU policies, law enforcement, international co-ordination

9. Financial European Central Bank inflation target of less than 2% per year, sets short term interest rates for the whole eurozone area, Implements and monitors Eurozone monetary policy European Investment Bank – owned by member states. Raise finance through financial markets, Invest in projects to promote aims of EU – large scale projects Court of Auditors monitors legality and efficiency of EU income and expenditure

10. Legal Court of Justice one judge from each member state Interprets and applies EU legislation

11. Member States pre-Enlargement

12. Enlargement - New Members Cyprus Cyprus Czech Republic Czech Republic Estonia Estonia Hungary Hungary Latvia Latvia Lithuania Lithuania Malta Malta Poland Poland Slovakia Slovakia Slovenia Slovenia

13. Activities

14. Agriculture CAP – Common Agricultural Policy –Sustainablility –Food Quality –Animal Welfare –Food Safety –Control –Farmers welfare/incomes –Employment in agriculture

15. Fisheries CFP – Common Fisheries Policy –Conservation of fish stocks –Aid to fishing industry to cope with changing circumstances –Monitor supply and demand for fish –Negotiate with non-EU members on fishing issues

16. Regions European Regional Development Fund European Social Fund European Agricultural Guidance and Guarantee Fund Financial Instrument for Fisheries Guidance –Aims to encourage development of poorer regions –Increase employment opportunities –Encourage new industry to locate in areas of structural decline –Develop infrastructure in poorer regions –Encourage new training methods and facilities

17. Finance/Economics Euro – monitor introduction and development Tax Harmonization – reduce differentials in tax regimes throughout the single market to aid competition and transparency Single Market – free movement of goods, services, labor and capital between member states

18. NAFTA 18

19. NAFTA Effective as of January 1, 1994 A trade agreement between CANADA, MEXICO, and the UNITED STATES which provides for the elimination of tariffs on North American goods shipped between the three countries.

20. MEXICO: Lower inflation and foreign debt create more well-paying jobs for Mexicans producing less incentive for Mexicans to work illegally in the U.S. become a richer market for American exporters. Expectations and Goals

21. 21 UNITED STATES: solidify an expanding trade relationship spur job creation at home help to continue the revolutionary shift throughout Latin America away from state controlled markets toward freer markets. Expectations and Goals

22. Mid-Continent International Trade Corridor 1. A trade pattern 2. A system of connecting highways and rail routes 3. An opportunity to strengthen economic development in a region

23. GATT/WTO 23

24. GATT/WTO GATT - General Agreement on Tariffs and Trade (1946) Facilitated rounds of multilateral trade negotiations: – Trade ministers met regularly for future rounds of multilateral negotiations. – When the ministers thought the time was right, they scheduled the next round. – 8 rounds of negotiation were completed under the GATT, most recently the Uruguay round (completed 1993, signed in 1994). These brought down tariffs considerably. – The Uruguay round created the World Trade Organization, which replaced the GATT 24

25. World Trade Organization History of the WTO/GATT 1. Specified general obligations that all signatories must observe Countries are permitted to protect own producers from “unfairly priced” imports: – Anti-dumping duties – Countervailing duties (to offset foreign subsidies) 2.A country that believes it has been harmed because another country has violated GATT rules can request arbitration and consultation. – Failing resolution, panel of experts convened to issue a ruling – This ruling can be unilaterally vetoed

26. World Trade Organization TRIPS Agreement attempts to narrow the gaps in the way intellectual property rights are protected around the world to bring them under common international rules. 26