international Business

2. Presenter:
Iqra Nawaz

3. Objectives
 Describe Economic Integration
 Explain economic integration in the
prospective of Trade creation and
Trade Diversion.
 Why companies focus on trade.
 Explain Free Trade Agreement
 Role of Iron Curtain in the world
 Role of Protectionism
 Explain Trade Blocs

4. Plan of Presentation
 Economic integration:
Objective
Levels of economic Integration
Free Trade Area
Iron Curtain
Protectionism
Trade Blocs

5. Economic Integration

6. Economic Integration:
 To established the rules and
regulations to enhance the economic
trade and corporation among all
members’ countries.

7. Trade Creation
 A process in which member of an
economic integration group begin to
focus their efforts on those goods and
services for which they have a
comparative benefit and start trading
more broadly with each other

8. Trade Diversion:
 The process when members of an
economic integration group decrease
their trade with non-member countries
in favor of trade with each other.

9. Levels of Economic
Integration
 Free Trade Area
 Customs Union
 Common Market
 Economic Union
 Political Union

10. Free Trade Area
 An economic integration arrangement
the member countries remove their
barriers and tariffs.

11. Iron Curtain
 The Iron Curtain was the ideological
variance and physical boundary of
Europe divided into two separate
areas from the end of World War II in
1945.
 This border was between East
Germany and West Germany,
between Czechoslovakia and Austria,
and between Hungary and Austria.

12. Cont……..
 The term symbolizes hard work by
the Soviet Union to block itself and its
satellite state from open makes
contact with the west and non-Soviet-
controlled areas.

13. Protectionism
 Protectionism, policy of protecting
domestic industries against foreign
competition by means of
tariffs, subsidies, import quotas, or
other restrictions or handicaps placed
on the imports of foreign competitors.
 Protectionism represents any attempt
to force to limits on trade in goods and
services.

14.  Different forms of protectionism.
 Tariffs
 Quotas
 Voluntary Export Restraint
 Intellectual property law
 Technical barriers to trade
 Import licensing
 Financial protectionism

15. Trade Bloc
A group of countries participating in
international trade as a whole, and
usually bound by a free trade
agreement or another compound.

16. Type of Trading Blocs:
 Free Trade Area
 Custom Union
 Common Market
 Complete Economic Union
 Complete Political Integration.
 Preferential Trading Agreements

17. Major Trade Blocs:
 EU (European union)
 NAFTA (North American Free Trade
Agreement)
 OPEC (Organisation of Petroleum Exporting
Countries)
 ASEAN (Association of South East Asian
Nations)
 SAARC (South Asian Association for Region
Cooperation)
 MERCOSUR (Mercado comun del ConoSur)/
southern commonmarkets (SCCM)

18. Reasons of Trading Bloc:
 Ability to locate stages of production in
different countries to take advantage of price
difference.
 When the distribution of power is relatively
equal, however open trading system
breakdown, in these conditions states
increase protectionist barriers and form
trading blocs.
 Trading blocs therefore tend to favor
exporters that benefits from enhance
protection because governments have
incentives to exempt import competiting
procedures that would lose protection to
ensure political support.