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Regionalism and Multilateralism. 5 Different degrees of integration. Preferential Trade Agreements : Ex: Caribbean Basin Initiative : US grants less-developed Caribbean nations trade preferences (reduced barriers or no barriers) as “economic aid”. FREE TRADE AREA. 2. Free Trade Area:
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5 Different degrees of integration • Preferential Trade Agreements: • Ex: Caribbean Basin Initiative: US grants less-developed Caribbean nations trade preferences (reduced barriers or no barriers) as “economic aid”.
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.)
Free 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) includingIndonesia, 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.
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.
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
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:
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.
