310 lecture 11
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This document discusses regional economic integration agreements. It provides examples of major integration agreements like the European Union (EU), North American Free Trade Agreement (NAFTA), and Gulf Cooperation Council (GCC). It outlines different levels of integration from free trade to political union. Benefits include greater wealth and cooperation while costs include loss of national sovereignty and impediments when groups lose out.
310 lecture 11
- 1. International Economics Lecture 11 Regional Economic Integration
- 2. Regional Economic Integration
- 3. Regional Economic Integration Agreements among countries to reduce trade barriers Over 400 Agreements
- 4. WTO 1995 157 Members
- 5. European Union EU 1993 27 Nations 500 million $17 trillion US
- 6. NAFTA North American Free Trade Act 1994 27 Nations
- 7. Levels of Integration Free Trade - Removing barriers between each other. Political Union Customs - Free Trade plus Economic Union common external trade EU policy Common Market Customs Common Market - Customs plus free flow of Free factors of production. Trade Economic Union - Common Market plus common currency and tax rates. Political Union - Economic Union plus unified political management. NAFTA
- 9. Case for Integration Greater wealth Cooperation Power
- 11. Case against Integration Trade Creation Trade Diversion
- 13. Impediments Integration Nations win, groups lose National Sovereignty
- 14. Euros Benefits • Lower costs 17 of the 27 EU • Easier to compare • Efficiency • Liquidity • New opportunities Costs • Lose control • Not optimal currency area • Currency should follow political union
- 15. The Cooperation Council of the Arab States of the Gulf Gulf Cooperation Council GCC 1981