Slide 1Regional Integration vs. MultilateralismRegional Integration vs. MultilateralismRegional Integration vs. MultilateralismRegional Integration vs. MultilateralismTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsTypes of Regional Trading ArrangementsSlide 14Slide 15Slide 16Impetus for RegionalismEffects of a Regional Trading ArrangementEffects of a Regional Trading ArrangementEffects of a Regional Trading ArrangementStatic welfare effects of a customs unionEffects of a Regional Trading ArrangementEffects of a Regional Trading ArrangementEffects of a Regional Trading ArrangementThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionThe European UnionVariable leviesThe European UnionGovernment support for agriculture, 2007The European Monetary UnionThe European Monetary UnionThe European Monetary UnionThe European Monetary UnionThe European Monetary UnionAdvantages and disadvantages of adopting a common currencyThe European Monetary UnionThe European Monetary UnionThe European Monetary UnionThe euro, ten years later: how has it performed?The European Monetary UnionNorth American Free Trade AgreementSlide 52North American Free Trade AgreementNorth American Free Trade AgreementNorth American Free Trade AgreementNorth American Free Trade AgreementGross domestic product, employment and labor productivity, 2007Slide 58North American Free Trade AgreementNorth American Free Trade AgreementNorth American Free Trade AgreementNorth American Free Trade AgreementFrom NAFTA to CAFTAFree Trade Area of the AmericasMajor western hemisphere regional trade agreementsFree Trade Area of the AmericasAsia-Pacific Economic CooperationTransition EconomiesGDP per capita* for the transition economies, 2007 (in dollars)Transition EconomiesTransition EconomiesEconomies in transition: 2009 index of economic freedom*Transition EconomiesTransition EconomiesTransition EconomiesSlide 76Transition EconomiesRegional TradingArrangements© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐1PowerPoint slides prepared by:Andreea ChiritescuEastern Illinois UniversityRegional Integration vs. Multilateralism•WTO•Promote trade liberalization through worldwide agreements•Trade liberalization by any one nation•Extended to all WTO members, 153 nations•Nondiscriminatory•Regional trading arrangements•Nations reduce trade barriers only for a small group of partner nations•Discriminating against the rest of the world© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐2Regional Integration vs. Multilateralism•Regional block – stumbling blocs to multilateralism•Members not greatly interested in worldwide liberalization•May not realize additional economies of scale from global trade liberalization•May want to invest their time and energy in establishing strong regional linkages •Rather than investing them in global negotiations© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐3Regional Integration vs. Multilateralism•Regional block – building blocks to global free trade and investment•When structured according to principles of openness and inclusiveness•May achieve deeper economic interdependence among members•Greater commonality of interests•Simpler negotiating processes© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐4Regional Integration vs. Multilateralism•Regional block – building blocks to global free trade and investment•Self-reinforcing process•Encourages the partial adjustment of workers •Out of import-competing industries in which the nation’s comparative disadvantage is strong•Into exporting industries in which its comparative advantage is strong© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐5Types of Regional Trading Arrangements•Economic integration•Process of eliminating restrictions on international trade, payments, and factor mobility•Results in the uniting of two or more national economies in a regional trading arrangement© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐6Types of Regional Trading Arrangements•Free-trade area•Association of trading nations•Members agree to remove all tariff and nontariff barriers among themselves•Each member maintains its own set of trade restrictions against outsiders•North American Free Trade Agreement (NAFTA)•Canada, Mexico, and the United States© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password protected website for classroom use‐7Types of Regional Trading Arrangements•Customs union•Agreement among two or more trading partners •To remove all tariff and nontariff trade barriers between themselves•Each member nation imposes identical trade restrictions against nonparticipants•Benelux•Belgium, the Netherlands, and