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COMERCIO INTERNACIONAL
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REGIONAL ECONOMIC AND POLITICAL
INTEGRATION
Lorena Montoro
Begoña Cortés
Maria del Carmen Ebang
Alexandra Posso
4. DETERMINANTS OF ECONOMIC AND POLITICAL INTEGRATION.
4.1 Common culture
4.2 History of Common Economic and Political Dominance
4.3 Regional proximity
4.3 Economic considerations
4.4 Political considerations
5. LEVELS OF REGIONAL ECONOMIC AND POLITICAL INTEGRATION AND
EXAMPLES OF INTEGRATION SUCCESSES
5.1 Bilateral agreements and Multilateral Forums and Agreements
5.2 Free Trade Agreements
5.3 Customs Unions
5.4 Common Markets
5.5 Monetary Unions
5.6 Political Unions.
INDEX:
● Regional Economic Integration refers to agreement between groups of countries in geographic
region to reduce and ultimately remove tariff and non tarif barriers to the free flow of goods,
services and factors of production between each other countries.
● A political integration refer to cooperation between states and formations of state-based
regimes.The deeper forms of integration refer to the constitution of new political entities , which
have a certain degree of independence in regard to the individual states.
Introduction
● A Common Culture
● A History of Common Economic and Political Dominance
● Regional Proximity
● Economic Considerations
● Political Considerations
Determinants of economic and political integration
A common culture was fostered by a former colonial power , people in
neighboring countries often share a language , as well as other cultural
elements , such as traditions , norms and religion.
The commonality of language and promote cooperation :In a economic
relationship in which culture does not constitute a barrier to communication .
A Common Culture
A history of a dominance by one nation in a region often leads to shared
cultural elements among the different peoples in that region as well as to
similar economic and political structures .
● From a marketer’s point of view this similarities make possible a
standardized approach to the market .
● From the country perspective , this integration is facilitated by
similarity of economic structures established by a former colonial
power and the shared language and culture.
A History of Common Economic and Political
Dominance
Countries doesn’t need to have
a common border to engage in
cooperative agreements ,
access that is facilitated by
direct and effective
transportation and
communication systems that
increases the economic
relationship.
Regional Proximity
Countries of similar development levels are likely to create a successful
common market that assures a preferential treatment for goods manufactured
in the region and also securing a substantial local consumer market.
The EU is a successful primary due to economic commonalities shared by
member countries .
● A highly developed industrial base and overall productivity
● An extensive transportation and telecommunications infrastructure
● Prosperous consumers who can afford to purchase the goods and services
of local firms
Economic Considerations
One of the main obstacles to regional economic and political integration is the
threat of losing national identity and sovereignty as part of the larger regional
structure .
A successful regional economic and political integration is one that promises
a more substantial and more rapid economic development for member
countries that they would otherwise experience in insolation from the
country group and one equitability addresses and protects regional as well as
national economic and political interest.
Political Considerations
LEVELS OF REGIONAL ECONOMIC AND POLITICAL
INTEGRATION AND EXAMPLES OF INTEGRATION
SUCCESSES
POLITICAL
UNION
MONETARY
UNION
COMMON MARKET
FREE TRADE AGREEMENT
GENERAL BILATERAL/MULTILATERAL
AGRREMENT
These are different
stages to research
political union...
...but not always all
countries reach the
political union
BILATERAL AGREEMENTS AND MULTILATERAL
FORUMS AND AGREEMENTS
Bilateral and multilateral agreements can be industry specific or products
exchanged between countries.
Agreements for a particular industry are made we different Goverments
use same agreements for a particular sector, reducing this way additional
taxes.
This started this economic integration through European Coal and Steel
Community in the fifties, and its resulting structure, the European Atomic
Energy Community.
DIFFERENCES BILATERAL/MULTILATERAL
AGREEMENTS
● If these agreements are limited for two countries we are talking about.
bilateral agreements.
play a formal regional integration.
● While multilateral forums and agreements involve multiples countries.
provide numerous regional cooperations.
A free trade agreement takes places between two or more countries and
involves a reduction in, or even elimination of, customs duties and other trade
barriers on all goods and services traded between the member countries.
Countries are free to charge their own tariffs to all entities external to the free
trade market.
FREE TRADE AGREEMENTS
•Countries reduce or eliminate trade
barriers on all goods and services
traded between them.
★ European Free Trade
Association. (EFTA)
-Member countries: Iceland,
Liechtenstein, Norway, and
Switzerland.
THE EUROPEAN FREE TRADE ASSOCIATION
SwitzerlandLiechtenstein
Iceland
Norway
★ Central European Free Trade
Agreement. (CEFTA)
-Member countries: Hungary, the Czech
Republic, Slovakia, and Poland.
-The more developed countries of the
former Soviet Bloc, adopting policies to
facilitate adherence to the European
Union.
THE EUROPEAN FREE TRADE ASSOCIATION
Member countries are attempting to
reduce tariffs and create an environment
that promotes mutual involvement in the
region.
ASEAN is ultimately to create a free trade
area where tariffs a nontariffs barriers are
eliminated and to provide a substantial
market.
THE ASSOCIATION OF SOUTHEAST ASIAN NATIONS AND
THE ASEAN FREE TRADE AREA
-Member countries: Brunei,
Cambodia, Indonesia, Laos,
Malaysia, Myanmar, the Philippines,
Singapore, Thailand, and Vietnam
NAFTA was eliminated all tariff and
nontariff barriers, such as import licenses
and quotas, between the members
countries.
One of the more important decisions for
NAFTA involves the rules of origin: To
benefit from a duty free status, goods must
have a 60 percent North American content.
-Member countries: Unites States, Canada,
and Mexico
THE NORTH AMERICAN TRADE AGREEMENT
ADVANTAGES FREE TRADE AGREEMENTS DISADVANTAGES
VIDEO
Central American Free Trade Agreement was signed in 2004 between the
United States, the five countries of Central American.
● Costa Rica
● El Salvador
● Guatemala
● Honduras
● Nicaragua
● Dominican Republic
CENTRAL AMERICAN FREE TRADE AGREEMENT-
Dominican Republic
A plan to create a free trade association by 2005 that would comprise all
member countries of 34 democratic nations American
THE FREE TRADE AREA OF THE
AMERICANS
A free trade organization that promotes ec cooperation among a coalition of 14
of Africa’s more affluent and developed nation,designed to foster increased
economic and governmental stability through the use of collective
peacekeeping forces.
The 14 countries are:
Lesotho,Malawi,Mauritius,Mozambique,Namibia,South Africa,swaziland,United
Republic of Tanzania,Zambia and Zimbabwe.
THE SOUTHERN AFRICAN DEVELOPMENT
COMMUNITY
❖ Trade association that eliminates or greatly reduces all trade restrictions
for member countries and also adopts common external tariffs on products
imported from outside the area.
❖ A customs Union includes:
● Botswana
● Swaziland
● Lesotho
● Namibia
CUSTOMS UNION
What is Common Markets?
It was a free market agreement among countries,in which the objective was to
reduce the tariffs and facilitated their free market in general.
Exemple: Mercosur
COMMON MARKETS
● It wa a bilateral and unilateral agreement which was established to reduce
tariffs barriers(LAIA).
● The countries LAIA:
Brasil,colombia,Bolivia,México
Chile,Ecuador,Paraguay,Uruguay,
Argentina,Venezuela,Perú.
THE LATIN AMERICAN INTEGRATION
ASSOCIATION
The Andean countries are:
● Bolivia
● Colombia
● Ecuador
● Peru
The objectives were:
● Maximise their economy
● to facilitate the free market
● unify their countries
● increase the trade
THE ANDEAN COMMON MARKET
It was a free trade agreement between the South American countries.
This agreement was formed between:
● Argentina
● Chile
● Paraguay
● Uruguay
● Venezuela.
THE SOUTHERN CONE COMMON MARKET
It was economic agreement between the central american countries,in which
the objective was to create a unity regional economic similar to the European
Union own.
CENTRAL AMERICAN COMMON THE
MARKET
Agreement between 19 members countries with the objective to integrate the
economic eliminating the trades barriers and to adopt a common tariff to
everybody.
The countries that integrate in COMESA are:
● Burundi,Zambia,Zimbabwe
● Comoros,Sudan,Switzerland,Uganda
● Democratic Republic of Congo,Seychelles
● Djibouti,malawi,Mauritius,Namibia,Rwanda
● Egypt,Eritrea,Ethiopia,Kenya,Madagascar.
THE COMMON MARKET FOR EASTERN
AND SOUTHERN AFRICA
Involves:
● A common monetary policy.
● The creation of a unified central bank.
● The use of a single currency.
Examples of successful monetary unions:
● European Monetary Union.
● West African Economic and Monetary Union.
● Economic Community of West African States.
THE EUROPEAN ECONOMIC AND MONETARY UNION
(EMU)
● EMU is agreed in the Treaty of Maastricht.
● The European Central Bank is created and complete the single market.
● Between 1999 and 2002 twelve member states withdraw their circulation coins and put the euro.
● All member states are part of the EMU, but only 17 are the "eurozone", either because, they chose not to use the single currency, or because they have to meet convergence criteria.
The EMU had three stages:
● involved the free movement of all capital in the EU.
● The abolition of all exchange controls.
● The creation of structural funds to remove inequalities between
countries.
THE EUROPEAN ECONOMIC AND MONETARY UNION (EMU)
❏ Convergence of economic policies.
❏ Establishing the European Monetary Institute
(EMI).
❏ Independence of national central banks.
❏ Establishing rules to curb budget deficits.
★ Euroland:Austria,Belgium,Finland,France,
Germany,Ireland,Italy,Luxembourg,the
Netherlands, Portugal and Spain adopted the
euro, with Greece joining in 2001 and Slovenia
2007 .
Each EU country must meet the following criteria:
● Price stability.
● Inflation in check.
● Interest rates varying no more than 2 percent from average interest
rates.
● Public debt can not exceed 60% of gross domestic product.
● The national deficit can not exceed 3% of GDP.
STABILITY AND GROWTH PACT (SGP)
● Single currency- the CFA franc.
● Modest Trade.
● Member countries are: Benin, Burkina Faso, Ivory Coast,Guinea-Bissau,
Mali, Niger, Senegal, and Togo.
THE ECONOMIC COMMUNITY OF WEST AFRICAN STATES (ECOWAS).
● Member countries are: the aforementioned (WAEMU) and Cape
Verde,Gambia,Ghana,Guinea ,Liberia, Nigeria and Sierra Leone.
● These past six members have set up a monetary union and have
committed to adopting common currency and they have pledged to
meet stringent convergence criteria:
❖ 5 % inflation.
❖ The national deficit can not exceed 4% of GDP.
❖ Central bank financing of the budget deficit limited to 10% of previous
year´s tax revenue.
THE WEST AFRICAN ECONOMIC AND MONETARY UNION (WAEMU)
● The highest level of regional integration; it assumes a viable economic
integration and involves the establishment of viable common governing
POLITICAL UNION
bodies, legislative bodies,and enforcement
powers.
● The European Union is the only example to
date of successful voluntary political
integration.
● 28 member states:
Germany, France, Italy, the Netherlands,Belgium,
Luxembourg,Denmark,Ireland, United
Kingdom,Greece, Spain, Portugal,Austria,
Finland,Sweden, Czech Republic, Cyprus,Estonia,
Latvia, Lithuania, Hungary,Malta, Poland,
Slovenia, Slovkia, Bulgaria,Romania and Croatia
EUROPEAN PARLIAMENT
BRUSSELS
STRASBOURG
LUXEMBOURG
PRESIDENT MARTIN
SCHULZADVISORY COMMITTEE 766 MEP´s
PURPOSE
● Approve EU legislation by Ordinary and Special process.
● Ratify international agreements.
● Approve annual budget.
● Exercise control over the Commission, the Council of the
EU, the European Council, the Court of Justice, ECB,
ECA, (has the power to censure motion on the
Commission.
WHO?
President: Martin Schulz.
14 VICE
766 MEPs Grouped by Political Parties.
HOW?
Vote by vote by secret and Direct Universal.
Lisbon Treaty: A country can not have less than 6 or more than 96 MEPs.
WHEN?
Every 5 years celebrating the European Parliament Elections.
HOW IS IT COMPOSED?
EUROPEAN COMMISSION
BRUSSELS PRESIDENT: JOSE MANUEL
DURAO BARROSO
28 COMMISSIONERS
PURPOSE
● Legislative initiative proposed laws to Parliament and Council.
● Manage and allocate budgetary funds.
● Ensure the implementation of the Law.
● International EU representation.
HOW IS IT COMPOSED?
WHO?
President: Jose Manuel Barroso Durao.
28 Commissioners for each member one country
UE.
HOW?
Single European Council President.
Single European Council President and
Commissioners.
Approval of election by the European
Parliament.
WHEN?
Every 5 years Commission Appoints new.
EUROPEAN CENTRAL BANK
FRANCFORT MARIO DRAGHI
Governing Council and General
Council
● PURPOSE
● Keep prices stable.
● Maintain a stable financial system.
● Set interest rates.
● Manage foreign exchange reserves.
● License ticketing.
● Monitoring changes in prices.
WHO?
EXECUTIVE COMMITTEE:
1 President Mario Draghi.
1 Vice.
4 members appointed by the eurozone countries.
GOVERNING COUNCIL:
Executive Committee
Governors of the 17 national central banks
GENERAL COUNCIL
President, Vice President and Governors of the 28 EU countries.
HOW?
The ECB is independent.
WHEN?
Governors of a Central Bank 5 years.
Committee members ECB executive 8 years.
Cese lack of capacity or serious offense.
HOW IS UP?
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