1. Copyright Atomic Dog Publishing, 2002 Regional Economic and Political Integration Dana-Nicoleta Lascu Chapter 4

2. Copyright Atomic Dog Publishing, 2002 Chapter Objectives Provide an overview of the determinants of regional economic and political integration Examine the different levels of economic and political integration and identify, within each world region, economic and political agreements that have met with success Examine the functions of the different policy and governance bodies of the European Union

3. Copyright Atomic Dog Publishing, 2002 Determinants of Economic and Political Integration Shared culture Shared history Regional proximity Similarity in level of economic development

4. Copyright Atomic Dog Publishing, 2002 Impediments to Economic and Political Integration Differences in culture and history Physical distance Differences in level of economic development Political considerations:  Concerns regarding loss of sovereignty  A history of conflict

5. Copyright Atomic Dog Publishing, 2002 General Bilateral/Multilateral Agreement Free Trade Agreement Common Market Monetary Union Monetary Union Political Union Political Union Levels of Regional Economic and/or Political Integration and Examples of Integration Successes

6. Copyright Atomic Dog Publishing, 2002 General Agreements: Bilateral and Multilateral Forums and Agreements Bilateral Agreements  Limited to two countries Multilateral Forums and Agreements  General agreements between multiple countries  Typically, they are industry specific  OPEC  NATO  Asia-Pacific Economic Cooperation  Commonwealth of Independent States

7. Copyright Atomic Dog Publishing, 2002 Free Trade Agreements: Europe Countries reduce or eliminate trade barriers on all goods and services traded between them  European Free Trade Association -Member countries: Iceland, Liechtenstein, Norway, and Switzerland  Central European Free Trade Agreement (CEFTA) -Member countries: Hungary, the Czech Republic, Slovakia, and Poland. -The more developed countries of the former Soviet Bloc, adopting policies to facilitate adherence to the European Union

8. Copyright Atomic Dog Publishing, 2002 Free Trade Agreements: Asia Countries reduce or eliminate trade barriers on all goods and services traded between them  Association of Southeast Asian Nations (ASEAN) -Most successful example of regional economic integration in Asia -Member countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam

9. Copyright Atomic Dog Publishing, 2002 Free Trade Agreements: Americas  North American Free Trade Agreement (NAFTA) -Member countries: Unites States, Canada, and Mexico  Free Trade Area of the Americas (FTAA) -Member countries: the 34 democratic nations of North, Central, and South America -Ambitious plan to create a market of 800 million people and an annual production worth $11 trillion in the current decade

10. Copyright Atomic Dog Publishing, 2002 Free Trade Agreements: Africa  Southern African Development Community (SADC) -Free trade organization promoting economic cooperation among 14 of Africa’s more affluent countries: Angola, Botswana, the Democratic Republic of Congo, Lesotho, Madagascar, Malawi, Mozambique, Namibia, Seychelles, the Republic of South Africa, Swaziland, Tanzania, Zambia, and Zimbabwe  Arab Maghreb Union (AMU) -Member countries: Algeria, Libya, Mauritania, Morocco, and Tunisia -(inactive, but not defunct)

11. Copyright Atomic Dog Publishing, 2002 Customs Union Trade association that eliminates or greatly reduces all trade restrictions for member countries and also adopts common external tariffs on products imported from outside the area  South African Customs Union

12. Copyright Atomic Dog Publishing, 2002 Common Market Eliminate all tariff and non-tariff barriers to trade, adopt common external tariffs, and allow for free movement of capital and labor within the common market  European Union reached this stage before establishing a monetary and political union  Latin American Integration Association  Andean Common Market  Southern Cone Common Market (MERCOSUR)  Central American Common Market  Common Market for Eastern and Southern Africa

13. Copyright Atomic Dog Publishing, 2002 Monetary Union Involves:  A common monetary policy  The creation of a unified central bank  The use of a single currency

14. Copyright Atomic Dog Publishing, 2002 Monetary Union, continued  European Monetary Union -Austria, Belgium, Finland, France, Germany, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain -European Central Bank  West African Economic and Monetary Union  Economic Community of West African States

15. Copyright Atomic Dog Publishing, 2002 Political Union Common governing & legislative bodies, and enforcement powers European Union  Member Countries: -Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden, and the United Kingdom

16. Copyright Atomic Dog Publishing, 2002 Bodies of the European Union  European Council: -The highest policy-making body, it consists of heads of member- countries’ government  European Parliament -Consists of members elected by direct universal suffrage with representation allocated among member states based on their population -Debates the policies and legislation in the European Union  Council of Nations -Consists of representatives from parliaments of member countries and acts as constitutional council that has the power to overrule the Court of Justice.

17. Copyright Atomic Dog Publishing, 2002 Bodies of the European Union, continued  Council of Ministers -The decision-making body (legislature) of the European Union -Composed of one minister from each member country -Passes laws based on proposals of the European Commission  European Commission -The executive body of the European Union -Subordinated to the European Council -Consists of a president and commissioners who are in charge of initiating and supervising the execution of laws and policies -Answers to the European Parliament -Acts only on behalf of and in the interest of the European Union, and not that of individual member states

18. Copyright Atomic Dog Publishing, 2002 Bodies of the European Union, continued  European Central Bank -Enacts the monetary policy for the countries that are members of the European Monetary Union -Maintains price stability within the European Monetary Union  European Court of Justice -The European Union’s equivalent of the United States Supreme Court -The final court of appeals -Can overrule decisions of the national courts

19. Copyright Atomic Dog Publishing, 2002 Chapter Summary Discussed determinants of regional economic and political integration Examined levels of integration and the different agreements in each world region Examined the functions of different policy and governance bodies of the European Union