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Chapter 5 - International Economic Integration - Coggle Diagram
Chapter 5 - International Economic Integration
Globalization and Economic Activity
Globalization is the result of technological process mainly in the areas of information technology, telecommunications, energy, transport and biotechnology as well as a shift in economic policies.
The gap between the rich and poor countries has grown. Not all developing countries followed the globalization process at the same pace.
Large firms in a globalized economy have subsidiaries in many countries and compete in global markets rather than in segmented national markets.
The World Trade Organization
It was designed to provide an international forum for encouraging free trade between member states by regulating and reducing tariffs on traded goods.
Has 144 members including China, which joined in 2001.
It focuses on all goods, services and intellectual property.
The International Monetary Fund and the World Bank
The IMF examines the economies of all its member states on a regular basis.
When a country runs into serious financial difficulties as a resylt of balance of payments deficits, it can turn to the Fund, which provides short-term financing on the condition that the country will follow a stabilization program.
These Funds must include: Contractionary monetary policy, contractionary fiscal policy, currency devaluation, contractionary income policy, and economic liberalization.
The World Bank was established along with the IMF,. It provides two main types of loans: investment loans, and adjustment loans.
Economic Integration in the continents
The European Union was founded after Europe faced World War II. This Union is formed by many treaties that not only allow peace but also removes barriers to the free flow of goods, services, and factors of production.
Such a thing created a single market which gave greater economic efficiency, and free movement of factors of production,
Now when it comes to North America, they have the NAFTA which incorporates a previous bilateral free-trade agreement between the United States, Canada and Mexico.
Asia has a less prominance with economic integration since they have large countries such as India and China. However, there are treaties between South East Asian nations, South Asia and the Asian Pacific.
Africa has treaties such as the ECPWSA which was inspried bu the European integration, COMESA, SADC, SACU.
Latin America and the Caribbean, have the LAFTA, which was established by Mexico and by most of the South American countries except Guyana and Surinam.
The Middle East, has had less succes with economic integration than any other part of the world. However, some progress has been made by abolishing tariffs and other restrictions.