Chapter 8 Learning Objectives

After studying this chapter, you should be able to:

1. make the case for global economic integration

2. understand the evolution of the GATT and the WTO, including current challenges

3. describe the advantages and disadvantages of regional economic integration

4. understand regional economic integration efforts in Europe, the Americas, Asia Pacific, and Africa

5. participate in two debates on global and regional economic integration

6. draw implications for action

GLOBAL ECONOMIC INTEGRATION

Regional economic integration - efforts to reduce trade and investment barriers within one region

Global economic integration - efforts to reduce trade and investment barriers around the globe

benefits - global economic integration raises incomes, generates jobs, and stimulates economic growth

flaws - environmental impact and unequal distribution of the fruits from more trade and investment among the haves and have-nots in the world

General Agreement on Tariffs and Trade (GATT)

Bretton Woods Conference introduced the idea for an organization to regulate trade as part of a larger plan for economic recovery after World War IIGATT's main objective was reduction of barriers to international trade through reduction of tariff barriers, quantitative restrictions and subsidies on trade through a series of agreements. GATT was a treaty, not an organizationThe functions of the GATT were taken over by the World Trade Organization (WTO) which was established during the final round of negotiations in the early 1990s

North American Free TradeAgreement (NAFTA)

free trade agreement between Canada, Mexico, and the United Statestariffs on half of the exports and imports among members removed immediatelyremaining tariffs phased out by 2010

Building Blocks or Stumbling Blocks

In the absence of global economic integration, regional economic integration is often regarded as the next best thing to facilitate free trade—at least within a region.However, another school of thought argues that regional integration has become a stumbling block for global integration.