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

Multinational Market

Regions and Market Groups

Chapter

10


Successful economic union requirements

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


Multinational market regions and market groups

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 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

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


Multinational market regions and market groups

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

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


Multinational market regions and market groups

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


Multinational market regions and market groups

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


Commonwealth of independent states

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


Multinational market regions and market groups

Central European Free-Trade Area (CEFTA)

Poland Hungary

Slovakia Czech Republic

Slovenia Romania

10-11

Irwin/McGraw-Hill


Multinational market regions and market groups

North American Free-Trade Area (NAFTA)

Canada

10-12

United States

Mexico

Irwin/McGraw-Hill


Multinational market regions and market groups

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


Multinational market regions and market groups

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


Multinational market regions and market groups

Southern Cone Free Trade Area (Mercosur)

ArgentinaBolivia

Brazil Chile

Paraguay Uruguay

10-15

Irwin/McGraw-Hill


Multinational market regions and market groups

Latin American Integration Association (LAIA)

 Argentina Mexico

 Bolivia Paraguay

 Brazil Peru

 Chile Uruguay

 Columbia Venezuela

 Ecuador

10-16

Irwin/McGraw-Hill


Multinational market regions and market groups

Andean Common Market (ANCOM)

Bolivia

Columbia

10-17

Ecuador

Peru

Venezuela

Panama (Assoc.)

Irwin/McGraw-Hill


Multinational market regions and market groups

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


Multinational market regions and market groups

Central America Common Market (CACM)

Guatemala

10-19

Costa Rica

Nicaragua

Honduras

Irwin/McGraw-Hill


Multinational market regions and market groups

The Future

• NAFTA

• SAFTA ???

• FTAA ???

10-20

Irwin/McGraw-Hill


Multinational market regions and market groups

Association of Southeast Asian Nations (ASEAN)

BruneiPhilippines

IndonesiaSingapore

LaosThailand

MalaysiaVietnam

Myanmar

10-21

Irwin/McGraw-Hill


Multinational market regions and market groups

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

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


Multinational market regions and market groups

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


Multinational market regions and market groups

Southern African Development Community (SADC)

 Angola South Africa

 Botswana Swaziland

 Lesotho Tanzania

 Namibia Zambia

 Malawi Zimbabwe

 Mauritius

 Mozambique

10-25

Irwin/McGraw-Hill


Multinational market regions and market groups

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


Multinational market regions and market groups

East African Customs Union

▶ Ethiopia▶ Tanzania

▶ Kenya▶ Uganda

▶ Sudan ▶ Zambia

10-27

Irwin/McGraw-Hill


Multinational market regions and market groups

Maghreb Economic Community

▶ Algeria▶ Tunisia

▶ Libya▶ Morocco

10-28

Irwin/McGraw-Hill


Multinational market regions and market groups

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


Multinational market regions and market groups

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


Multinational market regions and market groups

Customs and Economic Union of Central Africa (CEUCA)

▶ Cameroon▶ P. Rep. Of Congo

▶ C. Africa Repub.▶ Gabon

10-31

Irwin/McGraw-Hill


Multinational market regions and market groups

Arab Common Market

Iraq

Kuwait

10-32

Jordan

Syria

Egypt

Irwin/McGraw-Hill


Multinational market regions and market groups

Economic Cooperation Organization (ECO)

Pakistan

Iran

10-33

Turkey

Azerbaijan

Turkmenistan

Uzbekistan

Irwin/McGraw-Hill


Future multinational trade groups

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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