REGIONAL INTEGRATION
AND
AGREEMENTS
BY : SHAYA CASEY E. MILLO
BSBA/FM 3-1
REGIONAL INTEGRATION
Is a process in which states enter into a
regional agreement in order to enhance
regional cooperation through regional
institutions and rules.
as an association of states based upon
location in a given geographical area, for
the safeguarding or promotion of the
participants, an association whose terms
are fixed by a treaty or other
arrangements.
OBJECTIVES OF REGIONAL INTEGRATION
To pursue non-economic objectives such as strengthening political
ties and managing migration flows
To ensure increased security of market access for smaller countries
by forming regional trading blocks with larger countries
To improve members bargaining strength in multilateral trade
negotiations or to protest against the slow trade of peace
negotiations
To promote regional infant industries which cannot be viable without
a protected regional market.
LEVELS OF INTEGRATION
Free trade area
A free trade area is a grouping of countries to bring about free trade
between them. The free trade area abolishes all restrictions on trade
among the members but each member is left free to determine its
own commercial policy with non-members.
Customers Union
It not only eliminates all restrictions on trade among members but
also adopts a uniform commercial policy against the non members.
LEVELS OF INTEGRATION
Common Market
It allows free movement of labor and capital within the common
market, besides having the two characteristics of the customers
union, namely free trade among members and uniform tariff policy
towards outsiders.
Economic Union
The economic union achieves some degree of harmonization of
national economic policies, through a common central bank, unified
monetary and fiscal etc.
EUROPEAN UNION
Comprises of six nations which are Belgium, France, Federal Republic of
Germanny, Italy, Luxembourg, and Netherlands.
Was brought into being at January 1, 1958 by the Treaty of Rome, 1957.
Eliminates tariffs, quotas and other barriers on intra community trade.
Devices a common internal tariff on imports from the rest of the
world.
Allow the free movement of factors of production within the
community.
harmonise their taxation and monetary policies and social security
policies.
INDO-EU TRADE
The EU, teaken as a single unit, is India’s largest partner. India’s exports to
EC grew from Es 282 crore in 1970-71 to Rs 1447 crore in 1980-81.
Imports includes edible oils, fertilizers, textiles, jute, leathers and other
products.
India’s export performance has been regarded as poor because of lack of
price competitiveness, poor quality image, bad reputation in respect to
delivery schedules, and protectionist policy pursued by the EU countries.
EURO
The common currency of European Union which was launched by 11 of the
15 members of the Union, Janary 1, 1999.
MAASTRICH TREATY
Maastrich treaty of 1991 which set the stage for monetary union, laid down
certain eligibility criteria for member countries to join EMU such as
maintaining budget deficit, public debt, inflation, long term interest rates
and exchange rate within defined limits.
NORTH AMERICA FREE TRADE AGREEMENT (NAFTA)
NAFTA is perceived to expand by pulling together North, central and
South America.
NAFTA has achieved substantial trade liberalisation. The two way
trading relationship between US and Canada is the largest in the
world.
Mexico replaced Japan as the secod-largest market for US exporters,
while remaining as the third most important supplier to the US
NORTH AMERICA FREE TRADE AGREEMENT (NAFTA)
MARKET ACCESS - tarrif and non tarrif barriers, rules of origin,
governmental procurement.
TRADE RULES - safeguards, subsidies, countervailing and
antidumping duties, health and safety standards.
SERVICES - It provide for the same safeguards for trade in services
that exist for trade in goods.
INVESTMENT - It establishes investment rules governing minority
interests, portfolio investment, real property and majority owned or
controlled investments from the NAFTA countries
NORTH AMERICA FREE TRADE AGREEMENT (NAFTA)
INTELLECTUAL PROPERTY - US, Canada and Mexico, these three
countries pledge to provide adequate and effective protection and
enforcement of intellectual property rights.
DISPUTE SETTLEMENT - It provides a Dispute settlement process
that will be followed instead of countries taking unilateral action
against an offending party.
FUNCTIONS OF NAFTA
To eliminate barriers to trade in, and facilitate the cross border
movement of, goods and services between the territories of the
parties.
Promote the conditions of fair competition in the free trade area.
Increase substantially investment opportunities in their territories
Provide adequate and effective protection and enforcement of
intellectual property rights in each party's territory.
Create effective procedures for the implementation and application
of this agreement, and for its joint administration and the resolution
of disputes
ECONOMIC INTEGRATION OF DEVELOPING COUNTRIES
It has been advocated to accelerate economic development and
strengthen their trading and bargaining power.
UNCTAD( United nations conference on Trade and development)
believes that Regional economic groupings, integration should be
promoted among developing countries as a means of expanding.
Regional trade agreements among developing countries include the
Latin American free trade Association (LAFTA), the central American
Common Market (CACM), the ANDEAN PACT, and the Caribbean
Common Market (CARICOM) in Latin America.
ECONOMIC INTEGRATION OF DEVELOPING COUNTRIES
It was an establishment of Latin America Common Market consisting
of Brazil, Argentina, Chile, Uruguay and Paraguay. The southern Cone
Common market (Mercado Comun del Sur- MERCOSUR) consisting of
Argentina, Brazil, Paraguay and Uruguay was formed in 1991.
The MERCOSUR, world's third largest customs union had decision to
transform the bloc into a common market.
The MERCOSUR convergence plan has been dubbed a "little
Maastricht" because it resembles the European Union treaty which
helped the formation of the European Union and the EURO.
ASSOCIATION OF SOUTH EAST ASEAN NATIONS (ASEAN)
ASEAN is formed by Bangkok Declaration by five countries, viz.,
Indonesia, Malaysia, The Philippines, Singapore and Thailand, to
accelerate the economic progress.
The ASEAN constitutes a larger market for Japan than does the
United States.
Economic growth rate of ASEAN which is richly endowed with natural
resources has been very high. This region accounts for the lion's
share of the world's natural rubber, palm oil and tin. It is also an
important producer of sugar, coffee, timber, petroleum, nickel,
bauxite, tungsten and coal.
THANK YOU
