1. R EGIONALISM AND M ULTILATERALISM

2. 5 D IFFERENT DEGREES OF INTEGRATION 1. Preferential Trade Agreements : Ex: Caribbean Basin Initiative: US grants less- developed Caribbean nations trade preferences (reduced barriers or no barriers) as “economic aid”.

3. FREE TRADE AREA 2. Free Trade Area: Ex: European Free Trade Association (Ireland, Liechenstein, Norway, and Switzerland). Ex: NAFTA (North American Free Trade Agreement) between US, Mexico, and Canada 1994 In 2007: Reciprocal trade agreements within the group. Trade between Canada and Mexico increased. US exports to Canada and Mexico increased. US imports from Canada and Mexico steady Ex: Was to be the Free Trade Area of the Americas (North Am, South Am, Caribbean, Central American countries—35 were to expand NAFTAS –failed Jan. 1, 2005.)

4. NAFTA: US, MEXICO, AND CANADA

5. F REE TRADE AREAS CONTINUED Largest free trade area as of January 1, 2010 is:_________________________________________ We will discuss ASEAN group later as a common market (Association of SouthEast Asian Nations) including Indonesia, Malaysia, Philipines, Singapore, Thailand, Laos, Myanmar, Vietnam, Brunei, Camodia With the addition of China in 2010, the combined population is ________________________. The free trade agreement reduced tariffs on 7,881 product categories, or 90 percent of imported goods, to zero The average tariff rate on Chinese goods sold in ASEAN countries decreased from 12.8 to 0.6 percent on 1 January 2010. Meanwhile, the average tariff rate on ASEAN goods sold in China decreased from 9.8 to 0.1 percent. The six original ASEAN members also reduced tariffs on 99.11 percent of goods traded among them to zero.

6. CUSTOMS UNION 3. Customs Unions : ________________________________________ ____________________________have no trade restrictions within that list of countries but have standardized barriers for outside countries such as the US ________________________consists of 27 states including some former soviet union territories.

7. E UROPEAN U NION (EU)

8. COMMON MARKET 4. Common Market: Factors of production include: both outputs (final products/services) and inputs (factors of production, and raw materials) can be exchanged freely MERCOSUR: ( Mercado Común del Sur) Argentina, Brazil, Paraguay, Uruguay is the largest Latin American market (twice the size of Canada in monetary terms and 270 million people). Adding Andean community nations. ASEAN (Association of SouthEast Asian Nations): Indonesia, Malaysia, Philipines, Singapore, Thailand, Laos, Myanmar, Vietnam, Brunei, Camodia

11. ECONOMIC UNION 5. Economic Union: Must coordinate strategies for inflation, fiscal policies (government spending and taxation) This includes “stimulus” packages after the global economic recession in 2008 Ex:

13. MONETARY ECONOMIC UNION 5B. Economic and Monetary union Largest is the _______________________________________ _______________________________________________________ ___________________________: Austria, Belgium, Cyprus, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta Netherlands, Portugal, Slovenia, and Spain and Slovakia Monetary control via: _________________________ _______________________________________________ Some countries such as the UK have not adopted the Euro officially (can use the euro but maintain the British pound) and maintain control over their own monetary policy.

15. R ELATED STATES IN EUROPE