310 lecture 11

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Regional Trade Integration

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310 lecture 11

  1. 1. International Economics Lecture 11 Regional Economic Integration
  2. 2. Regional Economic Integration
  3. 3. Regional Economic IntegrationAgreements among countries to reduce trade barriers Over 400 Agreements
  4. 4. WTO 1995157 Members
  5. 5. European Union EU 1993 27 Nations 500 million $17 trillion US
  6. 6. NAFTANorth American Free Trade Act 1994 27 Nations
  7. 7. Levels of Integration Free Trade - Removing barriers between each other. Political Union Customs - Free Trade plus Economic Union common external tradeEU policy Common Market Customs Common Market - Customs plus free flow of Free factors of production. Trade Economic Union - Common Market plus common currency and tax rates. Political Union - Economic Union plus unified political management. NAFTA
  8. 8. Case forIntegration
  9. 9. Case forIntegrationGreater wealth Cooperation Power
  10. 10. Case againstIntegration
  11. 11. Case againstIntegrationTrade CreationTrade Diversion
  12. 12. Impediments Integration
  13. 13. Impediments IntegrationNations win, groups lose National Sovereignty
  14. 14. Euros Benefits • Lower costs17 of the 27 EU • Easier to compare • Efficiency • Liquidity • New opportunities Costs • Lose control • Not optimal currency area • Currency should follow political union
  15. 15. The Cooperation Councilof the Arab States of the Gulf Gulf Cooperation Council GCC 1981
  16. 16. Saudi ArabiaUAEOmanQatarBahrainKuwait

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