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Business and Management in A Global Context Chapter 5 Lectures

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27 views

Business and Management in A Global Context Chapter 5 Lectures

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andresboardmaster
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Multilateral Organisations and

Regional Integration –
Overview and Update
Multilateral Organisations and Regional Integration

Main Question: What are the benefits and


disadvantages of multilateral regulation and
regional integration?
• Regional integration—from Free Trade Area to
Political Union
o Examples: EU, NAFTA, ASEAN

• Multilateral trade organizations


o Examples: GATT, WTO

• Multilateral monetary system


o Example: IMF
Types of Regional Economic Integration

The EU has been a driving force of regional integration in


Europe, and it has gone through several stages of integration.
Five potential levels of regional integration
Economic
and
(sometimes)
Free Trade Customs Common Monetary Political
Level of Integration Area Union Market Union Union
Members agree to eliminate tariffs and non-
tariff barriers with each other, but maintain
their own trade barriers with non-member
countries. ✔
Examples: NAFTA; EFTA; AESAEconomic
Relations Agreement (CER)

Common external tariffs.


Example: MERCOSUR
✔ ✔
Free movement of products, labour and capital
Example: Pre-1992 European Economic ✔ ✔ ✔
Community
Unified monetary and fiscal policy by a central
authority
Example: The European Union today exhibits ✔ ✔ ✔ ✔
common trade, agricultural and monetary policies
Perfect unification of all policies by a common
organisation; submersion of all separate
national institutions ✔ ✔ ✔ ✔ ✔
Example: Remains an ideal; yet to be achieved
Leading economic unions
• The European Union (EU): the world’s most integrated
economic bloc.

• NAFTA (Canada, Mexico, the U.S.): facilitated by the


maquiladora program—U.S. firms locate manufacturing
facilities just south of the U.S. border and access low-
cost labour without having to pay significant tariffs.
Became USMCA in 2019/2020

• Asia Pacific Economic Cooperation (APEC): aims


for greater free trade and economic integration of the
Pacific Rim countries.
APEC Members

nam

Year economies joined APEC


1989 1991 1993 1994 1998 Non-Members
Asia Pacific Economic Cooperation (APEC)
• APEC aims for greater free trade and economic
integration of the Pacific Rim countries.
• It incorporates 21 nations on both sides of the Pacific,
including Australia, Canada, Chile, China, Japan,
Mexico, Russia, and U.S.
• Its members account for 85% of total regional trade, as
well as one-third of the world’s population and over half
its GDP.
• APEC aspired to remove trade and investment barriers
by 2020.
• Different national priorities and levels of affluence make
agreement very difficult
Members of ASEAN
Association of Southeast Asian Nations (ASEAN)

• 1967—ASEAN was created with the goal of


maintaining political stability and promoting
regional economic and social development.

• ASEAN created a free trade area in which many


tariffs were reduced to less than 5 percent.

• Economic diversity has slowed further regional


integration.

• ASEAN aims to incorporate stronger members to


accelerate trade relationships.
Other economic unions
• El Mercado Comun del Sur (MERCOSUR):
economic block in South America
• Caribbean Community and Common Market
(CARICOM)
• Association of Southeast Asian Nations (ASEAN)
• Australia and New Zealand Closer Economic
Relations Agreement (CER)
• Gulf Cooperation Council (GCC)
• 9 trading blocs in Africa
Multilateral Trade Organisations
The main ones we study are:

• World Trade Organisation: Makes rules for international


trade, handling disputes and promotes economic
development for developing countries.

• International Monetary Fund: Promotes international


monetary cooperation, provides assistance for countries
with balance of payments problems. For 188 countries it:
o Monitors global economy
o Offers technical assistance to developing counties
o Lends money to countries in financial difficulties
UPDATE (1)

• Multilateral trade organisations (MTOs) continue


to pursue three agendas:
o Development agenda
o Climate change agenda
o Financial sector regulation agenda

• Will MTOs develop a crisis management agenda


following the 2020 pandemic?

• Will MTOs influence increase after this pandemic


due to the problems resulting for world trade?
UPDATE (2)

• The UK left the EU in January 2020—impacts on


EU? Will other members leave?

• Reconsider membership? How will international


trade be affected?

• Will the ASEAN proposals for The Regional


Comprehensive Economic Partnership (RCEP)
be enacted from 2020?
The End

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