Slide 0Slide 1Successful Economic Union RequirementsSlide 3European Trade Areas - 1997*The European Economic Area: EU, EFTA, and AssociatesSlide 6A Comparison of the EU and NAFTASlide 8Slide 9Commonwealth of Independent StatesSlide 11Slide 12Slide 13Slide 14Slide 15Slide 16Slide 17Slide 18Slide 19Slide 20Slide 21Slide 22Comparison of Exports Among Members of APEC and the ECSlide 24Slide 25Slide 26Slide 27Slide 28Slide 29Slide 30Slide 31Slide 32Slide 33Future Multinational Trade GroupsMultinational MarketRegions and Market GroupsChapter104Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved. Successful Economic Union Requirements Economic Compatibility Political Compatibility Geographic Proximity Cultural CompatibilityWeakness in some must be balanced by strengths in othersIrwin/McGraw-Hill10-24Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Patterns of Multinational Cooperation Regional Cooperation Groups Free Trade Area Customs Union Common Market Political UnionIrwin/McGraw-Hill10-3Belgium Italy Iceland NorwayDenmark Luxembourg Liechtenstein SwitzerlandFrance The NetherlandsGermany PortugalGreece SpainIreland United KingdomEC Countries and EU Countries andAustria Norway IcelandFinland SwedenIn Membership Negotiations Second Tier-Awaiting EvaluationCypress Hungary Bulgaria RomaniaCzech Republic Poland Latvia SlovakiaEstonia Slovenia Lithuania MaltaEuropean Trade Areas - 1997*European Community (EC) European Free Trade Area (EFTA)European Unity (EU) European Economic Area (EEA)* Visit http://europa.eu.int/ (select Abc and then Agenda 2000 for details onrequirements of accession).Irwin/McGraw-Hill10-44Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. The European Economic Area: EU, EFTA, and AssociatesICELANDNORWAYSWEDENFINLANDDENMARKIRELANDUNITEDKINGDOMBELGIUMNetherlandsGERMANYFRANCESPAINPortugalSwitz.ITALYAustriaTURKEYGREECEATLANTIC OCEANMALTAEUEFTAEC AssociatedIrwin/McGraw-Hill10-54Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. EC InstitutionsEuropean CommissionEuropean CommissionCouncil of MinistriesCouncil of MinistriesEuropean ParliamentEuropean ParliamentEuropean Court of JusticeEuropean Court of Justice10-6Irwin/McGraw-HillA Comparison of the EU and NAFTA* Includes 15 Countries.**Includes intra-member trade.EU* 373.5 $ 8,180 1,899,466 1,927,914NAFTA 387.4 8,061 1,014,211 852,536Population GNP Imports** Exports**($ millions)* (per capita)* ($ millions) ($ millions)SOURCES: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August27, 1997; and International Marketing Data and Statistics, 1997 (London: Euromonitor,1997).Irwin/McGraw-Hill10-7Treaty of Amsterdam - Objectives To place employment and citizens’ rights at the heart of the Union.  To sweep away the last remaining obstacles to freedom of movement and to strengthen security. To give Europe a stronger voice in world affairs. To make the Union’s institutional structure more efficient with a view to enlarging the Union.For the most current information, visit www.europa.eu.int.Irwin/McGraw-Hill10-84Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Level of Involvement with the EC1. Firms based in Europe with well-established manufacturing and distribution operations in several European countries.2. Firms with operations in a single EC country.3. Firms that export manufactured goods to the EC from an offshore location.4. Firms that have not actively exported to EC countries.Irwin/McGraw-Hill10-94Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Commonwealth of Independent StatesRUSSIAN REPUBLICARCTIC OCEANTwelve republics, each with their own legislaturesTwenty smaller “autonomous republic” or homelands for various ethnic groupsKAZAKHSTANBELARUSUKRAINEMOLDOVAGEORGIAARMENIAAZERBAIJANTURKMENISTANUZBEKISTANTAJIKISTANKYRGYZSTANIrwin/McGraw-Hill10-104Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Central European Free-Trade Area (CEFTA) Poland Hungary Slovakia Czech Republic Slovenia RomaniaIrwin/McGraw-Hill10-114Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. North American Free-Trade Area (NAFTA) Canada Canada United States United States Mexico MexicoIrwin/McGraw-Hill10-124Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. North American Free-Trade Area Provisions Market Access  Non Tariff Barriers Rules of Origin  Customs Administration Investment  Services Intellectual Property  Standards Government ProcurementIrwin/McGraw-Hill10-134Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. NAFTA Rules of OriginRule Type Description Tariff shift rule Non-NAFTA imports undergo sufficient manufacture or processing to become products that can qualify under a different tariff classification. Value-content rule A set percentage of the value of the good must be North American (usually coupled with a tariff classification shift requirement). Some goods are subject to the value-content rule only when they fail to pass the tariff classification test because of non-NAFTA inputs. Irwin/McGraw-Hill* A complete description of the rules of origin can be found at www.mac.doc.gov/nafta/menu1.htm (select NAFTA Rules of Origin and Customs Information).10-144Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Southern Cone Free Trade Area (Mercosur) Argentina  Bolivia Brazil  Chile Paraguay  UruguayIrwin/McGraw-Hill10-154Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Latin American Integration Association (LAIA) Argentina  Mexico Bolivia  Paraguay Brazil  Peru Chile  Uruguay Columbia  Venezuela  EcuadorIrwin/McGraw-Hill10-164Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights reserved. Andean Common Market (ANCOM)BoliviaBoliviaColumbiaColumbiaEcuadorEcuadorPeruPeruVenezuelaVenezuelaIrwin/McGraw-Hill10-17Panama (Assoc.)Panama (Assoc.)4Copyright © 2002 by The McGraw-Hill Companies, Inc. A ll rights