REGIONALISM AND

MULTILATERALISM
5 DIFFERENT DEGREES OF INTEGRATION
1. Preferential Trade Agreements:

 Ex: Caribbean Basin Initiative: US grants less-

developed Caribbean nations trade preferences
(reduced barriers or no barriers) as “economic
aid”.
FREE TRADE AREA
2. Free Trade Area:

 Ex: European Free Trade Association (Ireland, Liechenstein, Norway, and

Switzerland).

 Ex: NAFTA (North American Free Trade Agreement) between US, Mexico, and
Canada 1994

 In 2007:

 Reciprocal trade agreements within the group.

 Trade between Canada and Mexico increased.
 US exports to Canada and Mexico increased.
 US imports from Canada and Mexico steady

 Ex: Was to be the Free Trade Area of the Americas (North Am, South Am,
Caribbean, Central American countries—35 were to expand NAFTAS –failed
Jan. 1, 2005.)
NAFTA: US, MEXICO, AND CANADA
FREE TRADE AREAS CONTINUED
 Largest free trade area as of January 1, 2010
is:_________________________________________

 We will discuss ASEAN group later as a common

market (Association of SouthEast Asian Nations)
including Indonesia, Malaysia, Philipines, Singapore,
Thailand, Laos, Myanmar, Vietnam, Brunei, Camodia

 With the addition of China in 2010, the combined

population is ________________________.
 The free trade agreement reduced tariffs on 7,881 product
categories, or 90 percent of imported goods, to zero
 The average tariff rate on Chinese goods sold in ASEAN
countries decreased from 12.8 to 0.6 percent on 1 January
2010.
 Meanwhile, the average tariff rate on ASEAN goods sold in
China decreased from 9.8 to 0.1 percent.
 The six original ASEAN members also reduced tariffs on
99.11 percent of goods traded among them to zero.
CUSTOMS UNION
3. Customs Unions:

 ________________________________________
____________________________have no trade
restrictions within that list of countries but have
standardized barriers for outside countries such
as the US

 ________________________consists of 27 states
including some former soviet union territories.
EUROPEAN UNION (EU)
COMMON MARKET
4. Common Market:

 Factors of production include:

 both outputs (final products/services) and inputs (factors of production, and

raw materials) can be exchanged freely

 MERCOSUR: (Mercado Común del Sur) Argentina, Brazil, Paraguay,

Uruguay is the largest Latin American market (twice the size of Canada in
monetary terms and 270 million people). Adding Andean community nations.

 ASEAN (Association of SouthEast Asian Nations): Indonesia, Malaysia,

Philipines, Singapore, Thailand, Laos, Myanmar, Vietnam, Brunei,
Camodia
ECONOMIC UNION
5. Economic Union:

 Must coordinate strategies for inflation, fiscal

policies (government spending and taxation)
 This includes “stimulus” packages after the global
economic recession in 2008
 Ex:
MONETARY ECONOMIC UNION
5B. Economic and Monetary union

 Largest is the _______________________________________

_______________________________________________________
___________________________: Austria, Belgium, Cyprus,
Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Malta Netherlands, Portugal, Slovenia, and
Spain and Slovakia

 Monetary control via: _________________________

_______________________________________________
 Some countries such as the UK have not adopted the Euro
officially (can use the euro but maintain the British pound)
and maintain control over their own monetary policy.
RELATED STATES IN EUROPE