Multinational market regions and market groups
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Multinational Market Regions and Market Groups. Chapter. 10. 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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Multinational Market Regions and Market Groups

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Multinational Market

Regions and Market Groups

Chapter

10


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


Patterns of Multinational Cooperation

Regional Cooperation Groups

Free Trade Area

Customs Union

Common Market

Political Union

10-3

Irwin/McGraw-Hill


European Trade Areas - 1997*

European Community (EC)European Free Trade Area (EFTA)

Belgium ItalyIcelandNorway

DenmarkLuxembourg Liechtenstein Switzerland

FranceThe Netherlands

GermanyPortugal

GreeceSpain

IrelandUnited Kingdom

EC Countries andEU Countries and

AustriaNorwayIceland

FinlandSweden

In Membership NegotiationsSecond Tier-Awaiting Evaluation

CypressHungaryBulgariaRomania

Czech RepublicPolandLatviaSlovakia

EstoniaSloveniaLithuaniaMalta

10-4

European Unity (EU) European Economic Area (EEA)

* Visit http://europa.eu.int/ (select Abc and then Agenda 2000 for details on

requirements of accession).

Irwin/McGraw-Hill


The European Economic Area: EU, EFTA, and Associates

ICELAND

EU

EFTA

SWEDEN

NORWAY

EC Associated

FINLAND

ATLANTIC OCEAN

10-5

Netherlands

DENMARK

UNITED

KINGDOM

IRELAND

GERMANY

BELGIUM

Austria

FRANCE

Switz.

ITALY

Portugal

SPAIN

TURKEY

MALTA

GREECE

Irwin/McGraw-Hill


EC Institutions

European Commission

10-6

Council of Ministries

European Parliament

European Court of Justice

Irwin/McGraw-Hill


A Comparison of the EU and NAFTA

Population GNP Imports** Exports**

($ millions)*(per capita)*($ millions)($ millions)

10-7

EU* 373.5 $ 8,180 1,899,466 1,927,914

NAFTA 387.4 8,061 1,014,211 852,536

* 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


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

For the most current information, visit www.europa.eu.int.

Irwin/McGraw-Hill


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


Twelve republics, each with their own legislatures

Twenty smaller “autonomous republic” or homelands for various ethnic groups

Commonwealth of Independent States

ARCTIC OCEAN

BELARUS

MOLDOVA

10-10

UKRAINE

RUSSIAN REPUBLIC

GEORGIA

ARMENIA

AZERBAIJAN

KAZAKHSTAN

UZBEKISTAN

TURKMENISTAN

KYRGYZSTAN

TAJIKISTAN

Irwin/McGraw-Hill


Central European Free-Trade Area (CEFTA)

Poland Hungary

Slovakia Czech Republic

Slovenia Romania

10-11

Irwin/McGraw-Hill


North American Free-Trade Area (NAFTA)

Canada

10-12

United States

Mexico

Irwin/McGraw-Hill


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


NAFTA Rules of Origin

Rule TypeDescription

Tariff shift ruleNon-NAFTA imports undergo sufficient manufacture or processing to become products that can qualify under a different tariff classification.

Value-content ruleA 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 www.mac.doc.gov/nafta/menu1.htm (select NAFTA Rules of Origin and Customs Information).

Irwin/McGraw-Hill


Southern Cone Free Trade Area (Mercosur)

ArgentinaBolivia

Brazil Chile

Paraguay Uruguay

10-15

Irwin/McGraw-Hill


Latin American Integration Association (LAIA)

 Argentina Mexico

 Bolivia Paraguay

 Brazil Peru

 Chile Uruguay

 Columbia Venezuela

 Ecuador

10-16

Irwin/McGraw-Hill


Andean Common Market (ANCOM)

Bolivia

Columbia

10-17

Ecuador

Peru

Venezuela

Panama (Assoc.)

Irwin/McGraw-Hill


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


Central America Common Market (CACM)

Guatemala

10-19

Costa Rica

Nicaragua

Honduras

Irwin/McGraw-Hill


The Future

• NAFTA

• SAFTA ???

• FTAA ???

10-20

Irwin/McGraw-Hill


Association of Southeast Asian Nations (ASEAN)

BruneiPhilippines

IndonesiaSingapore

LaosThailand

MalaysiaVietnam

Myanmar

10-21

Irwin/McGraw-Hill


ASEAN + 3

• Brunei • Singapore

• Indonesia • Thailand

• Laos• Vietnam

• Malaysia China

• MyanmarJapan

• Philippines South Korea

10-22

Irwin/McGraw-Hill


Comparison of Exports Among Members of APEC and the EC

Population, 1989Exports, 1990Exports, 1995GNP, 1996

(millions)(U.S. $ millions)(U.S. $ millions)(U.S. $ billions)

APEC2,235732,869770,09722,952Americas*406306,486311,0857,989Asia1812399,455419,9016,447Oceania2226,92834,111343

EC374515,915628,6068,180

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


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


Southern African Development Community (SADC)

 Angola South Africa

 Botswana Swaziland

 Lesotho Tanzania

 Namibia Zambia

 Malawi Zimbabwe

 Mauritius

 Mozambique

10-25

Irwin/McGraw-Hill


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


East African Customs Union

▶ Ethiopia▶ Tanzania

▶ Kenya▶ Uganda

▶ Sudan ▶ Zambia

10-27

Irwin/McGraw-Hill


Maghreb Economic Community

▶ Algeria▶ Tunisia

▶ Libya▶ Morocco

10-28

Irwin/McGraw-Hill


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


West Africa Economic Community

● 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


Customs and Economic Union of Central Africa (CEUCA)

▶ Cameroon▶ P. Rep. Of Congo

▶ C. Africa Repub.▶ Gabon

10-31

Irwin/McGraw-Hill


Arab Common Market

Iraq

Kuwait

10-32

Jordan

Syria

Egypt

Irwin/McGraw-Hill


Economic Cooperation Organization (ECO)

Pakistan

Iran

10-33

Turkey

Azerbaijan

Turkmenistan

Uzbekistan

Irwin/McGraw-Hill


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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