6. Incentives are created or political cooperation between neighboring states By grouping their economies together, the countries can enhance their political weight in the world. B – POLITICAL CASE FOR INTEGRATION Costs, painful adjustments Concerns over national sovereignty C – IMPEDIMENTS TO INTEGRATION
7. III - THE CASE FOR/AGAINST REGIONAL INTEGRATION A - TRADE CREATION Occurs when high-cost domestic producers are replaced by low-cost external suppliers within the free trade area. B - TRADE DIVERSION Occurs when lower-cost external suppliers are replaced by higher-cost suppliers within the free trade area. A regional free trade agreement will benefit the wold only if the amount of trade exceeds the amount it diverts. In theory, GATT and WTO rules should ensure that a free trade agreement does not result in trade diversion.
8.
9. In 1994, following the ratification of the Maastricht treaty Single European Act: The main problem with the EC was the disharmony of the member-countries technical, legal, regulatory and tax standards. The rules of the game differed substantially from country to country, which stalled the creation of a true single internal market. The “White Paper” was published in 1985, proposing that all impediments to the formation of a single market be eliminated by 1992. Objectives of the Act: frontier controls, mutual recognition of standards, public procurement, financial markets, lifting barriers, exchange controls, freight transport. “ The United States of Europe”
10. The Treaty of Maastricht Common currency, lower cost of doing business in Europe, reduce risks that arise from currency fluctuations. National authorities would lose control over monetary policy Enlargement of the European Union: Eastern European Countries? Fortress Europe?
11.
12.
13. B - FTAA Enlargement of NAFTA or the creation of two major trading blocks in the Americas SAFTA and NAFTA? C - CACM, CARICOM D - MERCOSUR
14. VI - ASIAN AND AFRICAN TRADING BLOCKS ASEAN, APEC AFRICAN COOPERATION VII - COMMODITY AGREEMENTS BUFFER-STOCK SYSTEM MULTIFIBER ARRANGEMENT (MFA)
15. VIII - THE UNITED NATIONS UNCTAD IX - THE ENVIRONMENT THE RIO EARTH SUMMIT
![Case: Ford in Europe ,[object Object],[object Object],[object Object],[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)