Ch 9 Regional Economic Integration BUS D 300

• agreements among countries in a geooraphic region to reduce tariff and non tariff barriers to flow of goods
• this is good for consumer it lowers prices

• free trade -No or little trade barriers (which is lest restrictive)
• Customs Union- a common external trade plicy
• Common Market- Free movement of factors of production
• Economic Union- A common currency, a common monetary and fiscal policy
• political union- A central political organization (is the most restrictive)

• Economic reasons
• - all member countriees can benefit from the free trade
• Political reasons
• - member countries can enhance their political power in the world

• certain groups or industries in a member country may lose
• - some US and Canadian workers in textile industry with NAFTA

• EC
• NAFTA
• ASEAN
• APEC

• all barriers to the trade of goods and service among member countries are removed
• 1 Yes - no or little trade barriers
• Examples EFTA and NAFTA

• 1 yes- no or little trade barriers
• 2 yes a common external trade policy
• ex Andean Community

• 1 yes- no or little trade barriers
• 2 yes- common external trade policy
• 3 yes - free movement of factors of production
• EX Mercosur

• 1 yes- no or little trade barriers
• 2 yes- common external trade policy
• 3 yes - free movement of factors of production
• 4 yes - a common currency, a common  monetary and fiscal policy
• ex EU (imperfect)

• 1 yes- no or little trade barriers
• 2 yes- common external trade policy
• 3 yes - free movement of factors of production
• 4 yes - a common currency, a common  monetary and fiscal policy
• 5 yes - a central political organization
• ex USA, future of EU

• you only have to deal with one currency and also you know the price of something across euro
• the drawback of having one currency is that national authorities have lost control over monetary policy

the objective of ASEAN is to foster free trade among member countries and to achieve cooperation in their industrial policies

• FTA
• ASEAN
• EU
• NAFTA