Economic Integration and cooperation (GATT : Predecessor to the WTO …
Economic Integration and cooperation
First case : Toyota in Europe
Economic integration definition : Describe the olitical and monetary agreements among nations and world regions in wich preference is given to member countries. It exists three major ways to approach such agreements :
Bilateral integration : It happened when two countries decide to cooperate more closely by agreements and tariff reductions.
Regional integration : A group of countries located in the same geographic area decide to cooperate between them/ Ex : TAFTA
Global Integration : It is when countries from all over the worlds decide to cooperate by the World Trade Organization.
MNE strongly depends on trade agreements because it is these treaties that influence the market
Triad : Japan, Europe & North America
GATT : Predecessor to the WTO
Founded in 1947 by the USA and grouping 23 countries.
Main goals : To put and end to quotas and reduce tariffs.
Principe : Participing nations have to open theirs markets equally to every other member nations.
GATT end in 1995 to give way to WTO
What does the WTO do :
GATT adopted the principales trade agreements from GATT and add BRICS's countries.
WTO seeks to restore total equity between countries : Help developing countries, raise barriers ...
Dispute settlement : European compay Airbus and Boeing for example.
Help to the rise of bilateral agreements
Regional economic integration : Regional trade agreement between two or more partners. Factors :
Major regional trading groups :
The European Union : The largest and most comprehensive regional economic group : Abolishing internal tariffs, same money, common agricultural policy ...
Organization structure : Leds by encompasses many governing bodies : European commision, European council, European Parliament, European central Bank ...
Schengen Area : People in European Union are free to go from one country to another.
Monetary Union : Adopted in 2002 the € as a way to eliminated currency as a trade barrier.
NAFTA : Adopted in 1994, this is a free trade agreement between USA, Mexico and Canada.
NAFTA is powerful because the three countries are equivalent of less than 28 countries from EU in term of population and GDP.
Others regional trading groups :
Caricom (Caribbean Community) : 6.5 million people, 60% are from Jamaica and Trinidad and Tobago.
MERCOSUR (1991) : It is the main trade group in South America with huge countries like : Brazil, Argentina, Uruguay ... It represents a population of 251 million people and 75% of South America's GDP.
Andean Community (CAN)
ASEAN (1967) : It is an Asian free trade agreement of ten asian countries. All the countries represent 622.5 million people and a combined GDP of 2.28 trillion of $. They created this association to stand up to the communist China.
The African Union (2002) : Composed of 53 countries, this is the main African's union.
Other forms of international cooperation
United nations : Established in 1945 to promote the peace and security worldwide.