Global-and-regional-cooperation-and-integration.pptx
- 1. GLOBAL AND REGIONAL COOPERATION AND INTEGRATION CHAPTER 5
- 2. INTERNATIONAL ECONOMIC COOPERATION AMONG NATIONS • A series of rules governing a trade that were first created in 1947 by 23 countries. By the time it was replaced with the WTO, there were 125 member nations. GATT has been credited with substantially expanding global trade, primarily through the reduction of tariffs. • The basic underlying principle of GATT was that trade should be free and equal. countries should open their markets equally to member nations, and there should be neither discrimination nor preferential treatment. 4/10/2023 PRESENTATION TITLE 2 GENERAL AGREEMENT ON TARIFFS AND TRAD E ( GATT )
- 3. • One of GATT’s key provisions was the most-favored-nation clause (MFN). It required that once a benefit, usually a tariff reduction, was agreed on between two or more countries, it was automatically extended to all other member countries. GATT’s initial focus was on tariffs, which are taxes placed on imports or exports. • GATT member countries focused on reducing barriers to trade beyond tariffs, such as government procurement rules, product standards, subsidies, taxes, and licensing. They agreed to limit or remove these barriers to trade. Agricultural products were the only items allowed to have export subsidies. To make it easier for products to be imported, countries simplified licensing and made consistent standards for imported and domestic goods. Duties on foreign and domestic goods had to be the same and follow the same procedures. 4/10/2023 PRESENTATION TITLE 3 GENERAL AGREEMENT ON TARIFFS AND TRAD E ( GATT )
- 4. • Developed as a result of Uruguay round of GATT. • Formed officially on January 1, 1995, the concept of the WTO had been in development for several years. When the WTO replaced GATT, it absorbed all of GATT’s standing agreements. • The World Trade Organization (WTO) is a forum for member nations to negotiate and discuss trade-related matters. Unlike its predecessor, the General Agreement on Tariffs and Trade (GATT), the WTO also addresses issues related to globalization, the environment, and people. Although the WTO does not necessarily establish formal agreements in all these areas, it provides a platform for discussing how global trade affects various aspects of the world. 4/10/2023 PRESENTATION TITLE 4 WORLD TRADE ORGANIZATION
- 5. • Similar to GATS is the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Intellectual property refers to just about anything that a person or entity creates with the mind. It includes inventions, music, art, and writing, as well as words, phrases, sayings, and graphics. 4/10/2023 PRESENTATION TITLE 5 WORLD TRADE ORGANIZATION
- 6. INTRODUCTION Regional economic integration has enabled countries to focus on issues that are relevant to their stage of development as well as encourage trade between neighbors. There are four main types of regional economic integration. 4/10/2023 PRESENTATION TITLE 6 REGIONAL ECONOMIC INTEGRATION
- 7. • FREE TRADE AREA. This is the most basic form of economic cooperation. Member countries remove all barriers to trade between themselves but are free to independently determine trade policies with nonmember nations. North American Free Trade Agreement (NAFTA). • CUSTOMS UNION. This type provides for economic cooperation as in a free-trade zone. Barriers to trade are removed between member countries. The primary difference from the free trade area is that members agree to treat trade with nonmember countries in a similar manner. 4/10/2023 PRESENTATION TITLE 7 4 MAIN TYPES OF REGIONAL ECONOMIC INTEGRATION
- 8. • Common market. This type allows for the creation of economically integrated markets between member countries. Trade barriers are removed, as are any restrictions on the movement of labor and capital between member countries. Like customs unions, there is a common trade policy for trade with nonmember nations. The primary advantage to workers is that they no longer need a visa or work permit to work in another member country of a common market. • Economic union. This type is created when countries enter into an economic agreement to remove barriers to trade and adopt common economic policies. 4/10/2023 PRESENTATION TITLE 8 4 MAIN TYPES OF REGIONAL ECONOMIC INTEGRATION
- 9. TRADE BLOC basically a free-trade zone, or near-free- trade zone, formed by one or more tax, tariff, and trade agreements between two or more countries. Some trading blocs have resulted in agreements that have been more substantive than others in creating economic cooperation.
- 10. PROS AND CONS OF CREATING REGIONAL AGREEMENTS 4/10/2023 PRESENTATION TITLE 10 Pros 1. Trade Creation 2. Employment Opportunities 3. Consensus and Cooperation Cons 1. Trade Diversion 2. Employment Shifts and Reductions 3. Loss of National Sovereignty
- 11. Major Areas of Regional Economic Integration and Cooperation
- 12. NORTH AMERICA: NAFTA 4/10/2023 PRESENTATION TITLE 12 • The North American Free Trade Agreement (NAFTA) came into being during a period when free trade and trading blocs were popular and positively perceived. • The goal of NAFTA has been to encourage trade between Canada, the United States, and Mexico. By reducing tariffs and trade barriers, the countries hope to create a free-trade zone where companies can benefit from the transfer of goods. • In the 1980s, Mexico had tariffs as high as 100 percent on select goods. Over the first decade of the agreement, almost all tariffs between Mexico, Canada, and the United States were phased out.
- 13. NORTH AMERICA: NAFTA 4/10/2023 PRESENTATION TITLE 13 • As a free trade agreement, the member countries can establish their own trading rules for nonmember countries. • NAFTA’s rules ensure that a foreign exporter won’t just ship to the NAFTA country with the lowest tariff for nonmember countries. NAFTA rules require that at least 50 percent of the net cost of most products must come from or be incurred in the NAFTA region.
- 14. SOUTH AMERICA: MERCOSUR 4/10/2023 PRESENTATION TITLE 14 • The Common Market of the South, Mercado Común del Sur or MERCOSUR, was originally established in 1988 as a regional trade agreement between Brazil and Argentina and then was expanded in 1991 to include Uruguay and Paraguay. • Over the past decade, Bolivia, Chile, Colombia, Ecuador, and Peru have become associate members, and Venezuela is in the process for full membership.
- 15. SOUTH AMERICA: MERCOSUR 4/10/2023 PRESENTATION TITLE 15 • The group has been strategically oriented to develop the economies of its constituents, helping them become more internationally competitive so that they would not have to rely on the closed market arena. • MERCOSUR is committed to the consolidation of democracy and the maintenance of peace throughout the southern cone.
- 16. OTHER TRADE AGREEMENTS IN THE AMERICAS
- 17. CARICOM and Andean Community 4/10/2023 PRESENTATION TITLE 17 • The Caribbean Community and Common Market (CARICOM), or simply the Caribbean Community, was formed in 1973 by countries in the Caribbean with the intent of creating a single market with the free flow of goods, services, labor, and investment. • a free trade agreement signed in 1969 between Bolivia, Chile, Colombia, Ecuador, and Peru. • Eventually Chile dropped out, while Venezuela joined for about twenty years and left in 2006.
- 18. CAFTA-DR 4/10/2023 PRESENTATION TITLE 18 • The Dominican Republic–Central America–United States Free Trade Agreement (CAFTA-DR) is a free trade agreement signed into existence in 2005. • Originally, the agreement (then called the Central America Free Trade Agreement, or CAFTA) encompassed discussions between the US and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.
- 19. CAFTA-DR 4/10/2023 PRESENTATION TITLE 19 • The goal of the agreement is the creation of a free trade area similar to NAFTA. • For free trade advocates, the CAFTA-DR is also seen as a stepping stone toward the eventual establishment of the Free Trade Area of the Americas (FTAA)—the more ambitious grouping for a free trade agreement that would encompass all the South American and Caribbean nations as well as those of North and Central America (except Cuba).
- 20. EUROPEAN-EU 4/10/2023 PRESENTATION TITLE 20 • The European Union (EU) is the most integrated form of economic cooperation. • The six founding nations were France, West Germany, Italy, and the Benelux countries (Belgium, Luxembourg, and the Netherlands), all of which signed a treaty to run their coal and steel industries under a common management. • The focus was on the development of the coal and steel industries for peaceful purposes.
- 21. EUROPEAN-EU IDENTIFIED 3 AIMS 4/10/2023 PRESENTATION TITLE 21 • The first was to establish a single, common currency, which went into effect in 1999. • The second was to set up monetary and fiscal targets for member countries. • Third, the treaty called for a political union, which would include the development of a common foreign and security policy, Common Security and defense policy and common citizenship.
- 22. EUROPEAN-EU 4/10/2023 PRESENTATION TITLE 22 • Primary goal for the development of the EU was that Europeans realized that they needed a larger trading platform to compete against the US and the emerging markets of China and India. Individually, the European countries would never have the economic power they now have collectively as the EU.
- 23. EU GOVERNANCE 4/10/2023 PRESENTATION TITLE 23 • European Council. The European Council provides the political leadership for the EU. The European Council meets four times per year, and each member has a representative, usually the head of its government. EU’s “Head of State”. • European Commission. The European Commission provides the day-to-day leadership and initiates legislation. EU’s executive arm. • European Parliament. The European Parliament forms one-half of the EU’s legislative body. The parliament consists of 751 members, who are elected by popular vote in their respective countries. The purpose of the parliament is to debate and amend legislation proposed by the European Commission.
- 24. EU GOVERNANCE 4/10/2023 PRESENTATION TITLE 24 • Council of the European Union. The Council of the European Union functions as the other half of the EU’s legislative body. Consists of a government minister from each member country and its representatives may change depending on the topic being discussed. • Court of Justice. The Court of Justice makes up the judicial branch of the EU. Consisting of three different courts, it reviews, interprets, and applies the treaties and laws of the EU.
- 25. ASIA: ASEAN 4/10/2023 PRESENTATION TITLE 25 • The Association of Southeast Asian Nations (ASEAN) was created in 1967 by five founding-member countries: Malaysia, Thailand, Indonesia, Singapore, and the Philippines. • primary focus is on economic, social, cultural, and technical cooperation as well as promoting regional peace and stability. • primary early missions of ASEAN was to prevent the domination of Southeast Asia by external powers— specifically China, Japan, India, and the United States.
- 26. ASIA: APEC 4/10/2023 PRESENTATION TITLE 26 • The Asia–Pacific Economic Cooperation (APEC) was founded in 1989 by twelve countries as an informal forum. • It now has twenty-one member economies on both sides of the Pacific Ocean. • APEC is the only regional trading group that uses the term member economies, rather than countries, in deference to China. Taiwan was allowed to join the forum, but only under the name Chinese Taipei.
- 27. MIDDLE EAST AND AFRICA: GCC 4/10/2023 PRESENTATION TITLE 27 • Gulf Cooperation Council (GCC), was created in 1981. • the group focuses on trade, economic, and social issues. • In 1989, the GCC and the EU signed a cooperation agreement. • The EU and the GCC also share common interests in areas such as the promotion of alternative energy, thus contributing to the resolution of climate change and other pressing environmental concerns; the promotion of proper reform for the global economic and financial policies; and the enhancement of a comprehensive rules-based international system.
- 28. MIDDLE EAST AND AFRICA: AEC 4/10/2023 PRESENTATION TITLE 28 • The African Economic Community (AEC) is an organization of the African Union states. Signed in 1991 and implemented in 1994, it provides for a staged integration of the regional economic agreements.
- 29. HOW DO THESE TRADE AGREEMENTS AND EFFORTS IMPACT BUSINESS? 4/10/2023 PRESENTATION TITLE 29 • Regional trade agreements have been beneficial for global businesses as they provide consistent investment and trade criteria and reduce barriers to entry. Manufacturing companies can easily move their goods between member countries within the trading bloc without incurring tariffs or additional regulations, making it cheaper and easier to do business.
- 30. THE UNITED NATIONS AND THE IMPACT ON TRADE 4/10/2023 PRESENTATION TITLE 30
- 31. OPERATING IN STABLE ENVIRONMENTS LEADS TO THE BEST OPERATIONS FOR A RANGE OF REASONS: 4/10/2023 PRESENTATION TITLE 31 • Staffing. Recruiting skilled labor becomes easier when the country is stable and secure. Companies face challenges in recruiting nonmilitary personnel for private sectors in unstable countries like Iraq and Afghanistan. Even development organizations struggle to send skilled talent for banking, finance, and service sector initiatives. Typically, development staff is sent to a country only after military force stabilizes the situation. Companies may need to pay higher hardship and risk pay but may still struggle to attract the best talent. • Operations. In unstable environments, companies fear loss or damage to property and investment. For example, goods in transit can easily be stolen, and factories or warehouses can be damaged.
- 32. OPERATING IN STABLE ENVIRONMENTS LEADS TO THE BEST OPERATIONS FOR A RANGE OF REASONS: 4/10/2023 PRESENTATION TITLE 32 • Regulations. Unclear and constantly changing business rules make it hard for firms to plan for the long term. • Currency convertibility and free-flowing capital. Often countries experiencing conflict often impose capital controls as well as find that their currency may be devalued or illiquid. Financial management is a key component of global business management.
- 33. THE UNITED NATIONS 4/10/2023 PRESENTATION TITLE 33
- 34. THE UNITED NATIONS 4/10/2023 PRESENTATION TITLE 34 • The United Nations (UN) was formed in 1945 at the end of World War II to replace the League of Nations, which had been formed in 1919. • Its original goals remain the same today: - to maintain international peace and security - to develop friendly relations between nations - to foster international cooperation in solving economic, social, humanitarian, and cultural issues.
- 35. UN CONSISTS OF 6 MAIN BODIES: 4/10/2023 PRESENTATION TITLE 35 1. GENERAL ASSEMBLY. This is the deliberative body of the UN and consists of all of the member countries that meet in regular sessions throughout the year. All of the members have an equal vote in the General Assembly. 2. SECURITY COUNCIL. This body is responsible for addressing issues related to peace and security. 3. Economic and Social Council (ECOSOC). This body is responsible for issues related to economics, human rights, and social matters. 4. Secretariat. The Secretariat oversees the operations of the UN and is technically headed by the Secretary-General 5. International Court of Justice. this body hears disputes between nations. 6. UN Trusteeship Council. While an official part of the UN Charter charged with overseeing all trustee territories under UN custody, this body is currently inactive.
- 36. THANK YOU
Editor's Notes
- #20: The United States and Cuba have had a complicated relationship since the Cuban Revolution in 1959, which led to the establishment of a communist government in Cuba under Fidel Castro.
- #22: By having a single currency, the EU can implement a single monetary policy that is tailored to the needs of the entire region udget deficit below 3% of their gross domestic product (GDP) and to limit their national debt to below 60% of their GDP. Stability and Growth Pact, the European Commission The EU has established a Common Foreign and Security Policy (CFSP), which seeks to coordinate member states' foreign policy positions and promote common EU positions in international affairs. The EU also has a Common Security and Defense Policy (CSDP), which seeks to enhance the EU's capacity for crisis management and peacekeeping operations. In addition, the EU has established a European Citizenship, which gives citizens of EU member states the right to live, work, and study in any other EU member state.
- #23: Overall, the EU has enabled European countries to compete more effectively in the global economy by providing a larger and more integrated trading platform. By pooling their economic resources and expertise, European countries have been able to achieve greater economic power than they would have had individually. This has enabled them to better compete against larger economic powers such as the United States and emerging markets like China and India.
- #25: The Court of Justice has the final say on matters of EU law and ensures that EU law is applied The General Court handles cases brought by individuals, companies, and member states against EU institutions. The specialized courts, such as the Civil Service Tribunal, deal with specific matters such as employment disputes.
- #29: The ultimate goal of the AEC is the establishment of a continental free trade area, which would create a single market for goods and services, promote cross-border investment and capital flows, and enhance economic growth and development throughout Africa.
- #30: educe barriers to entry for businesses seeking to expand into new markets. For example, manufacturing companies can move their goods between member countries within the trading bloc without incurring tariffs or additional regulations, making it cheaper and easier to do business. This can help to promote greater competition within the region, which can ultimately benefit consumers by driving down prices and improving the quality of goods and services.