Trade Integration SFLS

1. 经济一体化
Economic Integration

2. Economic Integration:
1.) Regional Economic Integration
2.) Trade Creation/ Diversion
Globalization though these
creations of “trading blocs”
Issues that occur from
these blocs

3. {

4. Process whereby
countries in a
geographic region
cooperate to either
reduce or eliminate
barriers to the free
flow of products,
people, or capital
Regional Trade Agreements
区域贸易协定
Slowly coming together
like this…

5. Preferential Trade
Agreements (PTA)
- lower barriers trade among
participating nations than with trade
with non members.
1.) Regional Economic Integration

6. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

7. - Removes all tariffs to trade in member countries.
- Each member maintains own level & form of
protection against non members.
Free Trade Area
Preferential Trade Agreements (PTA)
1.) Regional Economic Integration

8. Country
B
Country
A
Country
C
$15
$17
with own tariffs
$19
with own tariffs
- Removes all tariffs to trade in member countries.
- Each member maintains own level & form of
protection against non members.
Free Trade Area
1.) Regional Economic Integration
with own tariffs

9. Country
B
Country
A
Country
C
$15
$17
with own tariffs
$19
with own tariffs
$10with free trade
- Removes all tariffs to trade in member countries.
- Each member maintains own level & form of
protection against non members.
Free Trade Area
1.) Regional Economic Integration

10. NAFTA
North American Free
Trade Area
Includes:
- Canada
- United States
- Mexico
Largest example
today…(until Trump
destroys it)

11. CISFTA
Commonwealth of
Independent States Free Trade
Area
Includes:
- Russia
- Ukraine
- Belarus
- Uzbekistan
- Moldova
- Armenia
- Kyrgystan
- Kazakhstan

12. ASEAN
Association of Southeast
Asian Nations
Includes:
- Thailand
- Vietnam
- Indonesia
- Singapore
- Philippines
- Malaysia
- Laos
- Myanmar
- Cambodia
- Brunei
Not exactly a free trade area, (most
real life trade zones don’t fit neatly
in these categories)

13. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

14. - Duty-free 免税movement of products/services.
- Common external tariff to non members.
Free trade Area
Preferential Trade Agreements (PTA)
Customs Union
1.) Regional Economic Integration

15. If Germany, France, and Italy formed a custom union
The tariff imposed on imports of South Korean digital
cameras will be the same in the Germany, France,
Italy.
Individual countries cannot impose their own
unilateral单边tariffs that differ from other in the
customs union.
Example:
- Duty-free 免税movement of products/services.
- Common external tariff to non members.
Free trade Area
Preferential Trade Agreements (PTA)
Customs Union
1.) Regional Economic Integration

16. Country
B
Country
A
Country
C
$10
$17
with a single tariff
$17
with a single tariff
- Duty-free 免税movement of products/services.
- Common external tariff to non members.
Customs Union
1.) Regional Economic Integration
Now A +B are
like one price
against C

17. MERCOSUR
Common market of the South
***(but not a common market yet)
Includes:
- Argentina
- Brazil
- Paraguay
- Uruguay
- Venezuela* (suspended)

18. Have similar
tariffs against
non-members

19. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

20. - Customs union & free movement of workers
and capital within member countries.
Free trade Area
Preferential Trade Agreements (PTA)
Customs Union
Common Market
(Single Market)
1.) Regional Economic Integration

21. Country
A
Country
B
- Customs union & free movement of workers
and capital within member countries.
Common Market
(Single Market)
1.) Regional Economic Integration

22. EU
European Union
(not yet a full political union)*
Includes:
- Germany
- Italy
- Poland
- Romania
- Sweden
- Greece
- Bulgaria
- France
- Hungry
- Finland
- Austria
- Spain
- Czech Republic
- Croatia
- Ireland
- Cyprus
- Lithuania
- Malta
- Slovakia
- Portugal
- Estonia
- Belgium
- Slovenia
- Latvia
- Denmark
- Netherlands
Officially is a Common
Market still working on
becoming more integrated

23. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

24. - where two or more states share the
same currency, though without there
necessarily having any further
integration.
Free trade Area
Preferential Trade Agreements (PTA)
Customs Union
Common Market
Monetary Union
Economic Union
(Currency Union)
1.) Regional Economic Integration
Most Monetary Unions also
have at least a Customs
Union as well, or typically a
Common Market.

26. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

27. - Common market & full integration of all
members.
- Supranational authority for joint economic
policy making.
Requires:
* one central bank
* single monetary system
* unified fiscal system
* common economy and foreign policy
Free trade Area
Preferential Trade Agreements (PTA)
Customs Union
Common Market
Economic Union
1.) Regional Economic Integration

28. The United States
is an economic
example of this.

29. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

30. Trade Creation
1.) Regional Economic Integration
Jobs
Advantages to Integration
Protection
Increased
Economies of
Scale
Disadvantages to IntegrationVs.
Increased
investment
Trade Diversion
Retaliation
Decreased
Investment

31. Trade Creation
1.) Regional Economic Integration
Jobs
Advantages to Integration
- Increase access to markets.
- Well duh…
Protection - Firms inside blocs and protected from
cheaper imports from outside the bloc.
Increased
Economies of
Scale
- Can expand business and lead to lower
prices for some firms.
Disadvantages to IntegrationVs.
Increased
investment
- More foreign direct investment (FDI)

32. Trade Creation
1.) Regional Economic Integration
Jobs
Advantages to Integration
- Reduces benefits of
specialization and comparative
advantage.
Protection - Loss benefits of free trade.
Increased Economies
of Scale - Can cause type of trade wars.
Disadvantages to IntegrationVs.
Increased investment
- Lose foreign direct investment
(FDI) from outside the bloc.
Trade Diversion
Retaliation
Decreased
Investment

33. So to summarize…

34. Stages of
integration
Free
imports &
exports
Common
External
Tariff
Free
Factors of
production
movement
Common
Currency
Common
Economic
Policy
Free Trade
Area
Customs
Union
Common
Market
Monetary
Union
Economic
Union
1.) Regional Economic Integration

35. NAFTA
North American Free
Trade Area
Includes:
- Canada
- United States
- Mexico

36. ASEAN
Association of Southeast
Asian Nations
Includes:
- Thailand
- Vietnam
- Indonesia
- Singapore
- Philippines
- Malaysia
- Laos
- Myanmar
- Cambodia
- Brunei

37. MERCOSUR
Common market of the South
***(but not a common market yet)
Includes:
- Argentina
- Brazil
- Paraguay
- Uruguay
- Venezuela* (suspended)

38. EU
European Union
(not yet a full political union)*
Includes:
- Germany
- Italy
- Poland
- Romania
- Sweden
- Greece
- Bulgaria
- France
- Hungry
- Finland
- Austria
- Spain
- Czech Republic
- Croatia
- Ireland
- Cyprus
- Lithuania
- Malta
- Slovakia
- Portugal
- Estonia
- Belgium
- Slovenia
- Latvia
- Denmark
- Netherlands

39. The End
Thank you 