The document discusses cross-national cooperation through various international and regional trade agreements and economic integration efforts. It describes the World Trade Organization (WTO) and its role in facilitating global free trade. Various types and examples of regional economic integration are also outlined, including the European Union, NAFTA, and ASEAN. The key effects and structures of economic integration agreements are summarized.

1. Cross-national Cooperation
and Agreements

2. World Trade Organization (WTO)
 General Agreement on Tariffs and Trade
(GATT)
formed in 1947 was replaced by WTO in 1995.
 The goal of WTO is…
To facilitate the development of a free and open
trading system in the world
To adjudicate trade disputes between or amongst
member nations
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3.  WTO rulings are binding. If an offending
country fails to comply with a judgment,
the rights to compensation and
countervailing sanctions will follow.
 Most-favored nation clause (MFN): is
the fundamental principle of “trade
without discrimination.”
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4. Economic Integration
 Economic integration: is an agreement between or
amongst nations within an economic block to
reduce and ultimately remove tariff and nontariff
barriers. Factors favoring integration are:
- Cultural similarity
- Geographic proximity
- Political will
 Approaches to economic integration include:
global integration via the World Trade
Organization
bilateral integration between two countries
regional integration via an economic block
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5. Effects of Economic
IntegrationStatic effects: the shifting of resources from inefficient
to efficient firms as trade barriers fall
Trade creation: production shifts from less efficient domestic
producers to more efficient regional producers
Trade diversion: trade shifts from more efficient external sources
to less efficient suppliers within the bloc following the imposition of
common external barriers
Dynamic effects: the gains from overall market growth,
the expansion of production, the realization of greater
economies of scale and scope, and the increasingly
competitive nature of the market
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6. Types of Regional Economic
Integration
 Regional Cooperation: initial moves, no
serious tariff implication
 Free Trade Area: no internal tariff
 Customs Union: no internal tariff and common
external tariff
 Common Market: no internal tariff, common
external tariff and factor mobility
 Economic Integration: no internal tariff,
common external tariff, factor mobility, common
fiscal and monetary policy, common currency,
and political integration

7. Structure of European Union
 European Parliament (elected by the peoples of
the Member States)
 Council of the European Union (representing
the governments of the Member States)
 European Commission (driving force and
executive body)
 Court of Justice (ensuring compliance with the
law)
 Court of Auditors (controlling sound and lawful
management of the EU budget)

8. North American Free Trade Agreement
(NAFTA)
 Established in 1994 by United States, Canada
and Mexico, phases in over a period of 15 years
 NAFTA covers:
Market access (tariff and nontariff barriers)
Trade rules (subsidies and antidumping)
Services
Investment
Intellectual property
Dispute resolution

9. Regional Integration Groups
 Europe
○ European Union (EU)
○ European Free Trade Association (EFTA)
 Asia
○ Association of Southeast Asian Nations (ASEAN)
○ Asia Pacific Economic Cooperation (APEC)
○ South Asian Association for Regional Cooperation (SAARC)
○ Economic Cooperation Organization (ECO)
○ Gulf Cooperation Council (GCC)
 Africa
○ Southern African Development Community (SADC)
○ Common Market for Eastern and Southern Africa (COMESA)
○ Economic Community of West African States (ECOWAS)

10. Association of South East Asian Nations
(ASEAN)
 Organized in 1967
 Member countries are protected in terms of
tariff and nontariff barriers
 Holds tremendous potential market
opportunities with 500 million consumers
 Total 10 countries