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Regions and Market Groups
Multinational Market Regions and Market Groups Chapter 10
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Successful Economic Union Requirements
Economic Compatibility Political Compatibility Geographic Proximity Cultural Compatibility Weakness in some must be balanced by strengths in others 10-2 Irwin/McGraw-Hill
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Patterns of Multinational Cooperation
Regional Cooperation Groups Free Trade Area Customs Union Common Market Political Union 10-3 Irwin/McGraw-Hill
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European Trade Areas - 1997*
European Community (EC) European Free Trade Area (EFTA) Belgium Italy Iceland Norway Denmark Luxembourg Liechtenstein Switzerland France The Netherlands Germany Portugal Greece Spain Ireland United Kingdom EC Countries and EU Countries and Austria Norway Iceland Finland Sweden In Membership Negotiations Second Tier-Awaiting Evaluation Cypress Hungary Bulgaria Romania Czech Republic Poland Latvia Slovakia Estonia Slovenia Lithuania Malta 10-4 European Unity (EU) European Economic Area (EEA) * Visit (select Abc and then Agenda 2000 for details on requirements of accession). Irwin/McGraw-Hill
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The European Economic Area: EU, EFTA, and Associates
ICELAND EU EFTA NORWAY SWEDEN EC Associated FINLAND 10-5 ATLANTIC OCEAN Netherlands DENMARK UNITED KINGDOM IRELAND GERMANY BELGIUM Austria FRANCE Switz. ITALY Portugal SPAIN TURKEY MALTA GREECE Irwin/McGraw-Hill
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EC Institutions European Commission Council of Ministries
10-6 Council of Ministries European Parliament European Court of Justice Irwin/McGraw-Hill
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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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Treaty of Amsterdam - Objectives
To place employment and citizens’ rights at the heart of the Union. To sweep away the last remaining obstacles to freedom of movement and to strengthen security. To give Europe a stronger voice in world affairs. To make the Union’s institutional structure more efficient with a view to enlarging the Union. 10-8 Irwin/McGraw-Hill For the most current information, visit
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Level of Involvement with the EC
1. Firms based in Europe with well-established manufacturing and distribution operations in several European countries. 2. Firms with operations in a single EC country. 3. Firms that export manufactured goods to the EC from an offshore location. 4. Firms that have not actively exported to EC countries. 10-9 Irwin/McGraw-Hill
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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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