Regional Integration: Process, Types & Benefits of Collaboration, Study notes of Economics

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Regional Integrations

Regional Integrations

Defining Regionalism

Refers to a formal process of

intergovernmental collaboration between

two or more states (Ravenshill, 2005).

Regions are social constructions, and can

be viewed as a particular ‘scale’ of activity

that is ‘bounded’ or has borders to define

those in and those out (Brenner, 2004)

Bilateral agreements are also considered

as regional agreements by the WTO

A Hierarchy of Regional Economic Integration Initiatives

Free Trade

Area

Elimination of

Trade Barriers

Customs

Union

+ Common External

Trade Positions

Common

Market

+ Labor/Capital

Mobility

Economic

Union

+ Coordinated Economic

and Fiscal Policy

Political

Union

+ Coordinated Political

and Social Policy

Types of Trade Blocs

Level of

Integration

No Tariffs

and Quotas

Common

Tariffs and

Quotas

No

Restrictions

on Factor

Movements

Harmonized/

unified Eco.

Policies &

Institutions

Unified Eco.

& Political

Policies &

Institutions

Free Trade

Area

Yes No No No No

Customs

Union

Yes Yes No No No

Common

Market

Yes Yes Yes No No

Economic

Union

Yes Yes Yes Yes No

Political

Union

Yes Yes Yes Yes Yes

Major Regional Economic

Agreement Initiatives

The North American Free Trade

Agreement (NAFTA)



U.S.A, Canada, and Mexico



Went into effect on January 1, 1994



Proposal to expand NAFTA to include all countries in the

Western Hemisphere, except Cuba



This region accounts for 37% of all U.S. trade, $

billion in American investment, 800 million people, and

a $13 trillion economy

The Association of Southeast Asian

Nations (ASEAN)



Indonesia, Malaysia, Philippines, Singapore,

Thailand, Brunei Darussalam, Vietnam,

Laos, Myanmar, and Cambodia



Total population of 500 million, area of 4.

million square kilometers, GDP of U.S. $

billion, a total trade of U.S. $ 720 billion

The European Union (EU)

The European Union ( EU ) is a political and economic

union of 27 member states located primarily in

Europe

-It was established by the Treaty of Maastricht in 1993

upon the foundations of the pre-existing

European Economic Community.

• With almost 500 million citizens, the EU combined

generates an estimated 30% share of the world's

nominal GDP( US$16.8 trillion in 2007).

-The European Union's activities cover all areas of

public policy, from health and economic policy to

foreign affairs and defence.

-The most important EU institutions are the Council

of the European Union the European

Commission the European Parliament and the

European Court of Justice.

-Asia-Pacific Economic Cooperation ( APEC ) is a group of

Pacific Rim countries who meet with the purpose of improving

economic and political ties. It holds annual meetings in each of the

member countries and has standing committees on a wide range of

issues, from communications to fisheries and education and

training.

-Currently, most countries (21 in all) with a coastline on the Pacific

Ocean are members of the organization; they include USA, Japan,

Australia, Canada, Singapore, Malaysia, Indonesia, China, Russia,

Chile

APEC