nal economic integration 5.2 Region So 5.2-Regional economic integration * The idea behind regional economic integr is that without trade barriers, member countries will be better off * In regional agreements, they are called the TRADING BLOCS University College of stamabed 7 Fee st Prepared by : Dr. Catalina Ationde foremce 7g jc integration , le + figure $3, establi a Custer Anion norenal raclude. 5.2 Regional economic integration i ic i ti : ls mic integration om le 5.2 Regional econo BI economic so anit gots ind src a Seen tas ‘The economic and political reasons fOr Bessey Gears ech i bran teen mene er economic integration oe Soli coun og TC ee One an te [Beg ERE the option soe SPERM oa ere peer efwemcer woe ucdos Beammenit Union, The.Counties. FEU Coordinate tei fepectue peonenat POLES, LAiss and ye bfrrontiad SEAS > Regional economic integration 5.2 Regional economic integration The reasons against economic integration Only when the amount of trade it creates is greater than the amount that itis diverting ‘The reasons against economic integration. nation as a whole benefits from integration, some groups may actualy ose. + integration requires that countries give up some control over monetary policy fiscal policyandtrade policy. yr 97S fone country has economic debacle the rest of the trading bloc will also suffer (Greece). + Trade creation occurs when tow-c within a free trade area replace geo omestie producers, while wade deessth occurs when higher-costsupsliers within haemo ree replace lowercost extemal gape5.2 Regional economic integration + Example of trade diversions the UK's import of ‘Before Britain ‘most lamb ‘ame fyom New Zealand, the cheapest lamb producer. However, when Britain joined the EU the common externa tariff made it more expensive to ‘import lamb from New Zealand than from countries inside the union, thus France became the majority ‘exporter of lamb to the UK. Trade was diverted from + the General Agreement on Tariffs and Trade a uc (GATT) (2948), and WTO{3995) University Colloge of stamabad «> Prepared by The Eu S De Catalina Ande for BiCS Taree) “the us ciain thot enc ; others 5.3 The multilateral trade system 5.3 The multilateral Cue oeaem aniplone wo erkablished tA 84S Iouvef ~The WTO u the main muster! ogaiston vole 0 wey * Taking rls oritrnatora te dregs onic antvemn tonto | + ding san cence oes king ife easier for all pagans This noes eg ou orion set af rls Yor tereaora| 30g pe [Fre WTO% penne of rordsetmnaton mean» counry eqns ducrmiate aga some on Shabeneie other + aking comes, generating Jobs and simulating econo Pout by cain rade barrens = Other multilateral organisations 5.3 The multilateral trade system once nee fates id mts orien escceecnetmer: pct eat fcr bee gone ot rte amr: bm it Truliettetanatentthroeeuene orton sheer5.4 The multilateral monetary system 5.5 Regional integration examples Europe + The European Union (EU) with 27 members + EU single market and the Eurozone (since 2002) + EU competition poley Christine Lagarde eS ate + SEE further (netp://en .itkipedia.org/wiki/European_Integrati = ae Universy Colegeottsamabad 2" Prepares by : Dr catalina Atiencefor 2s Fp) 5.5 Regional integration examples 5,5 Regional integration examples europe + How does EU policy shape international Five nstutions govern the EU: ‘+ The European Council resolves major policy issues and sets. business ? ener sa cei ote e] +The apees comamladan is esponsbeformpiementog 7 ee Edit ea et ae cersenar tate ueay te oe ne ‘single market, oy MES ave ye eesti Seer eas Uncnts crite + The free movement of people |, ck erat « The European Pacigment debates egaation proposed by | the commision sd forwarded tit Sythe couse. | 2 The Court of hse acts asthe supreme sppedls cour fo aula * European competition policy. 5.5 Regional integration in Europe 5.5 Regional integration in Europe Fer ert Sut: theres movement opp ‘trade barriers between member countries. Internal customs a tern Patveor: Sout) ant ‘basiport contios have been abolished. * People from EU member states are free to work Bet ee oor me ee iether curtin The hs moved ognraree muta - Reta reg-ttecuommege + uaeaon sn ining srs EU coun Sareea ee nee None snes wed Movement of EU students and the advancement other dustin across core * Asommon eternal tari ppie 0a ported goods across + Reeralsaton testes proteionsmin eal martes A AX, k 8hee ROP eRegional integration in Europe 5.5 Regional integration in Europe | — {pote and Evopean competion oer regen Commision equate fo competion wes uch a * esa cotson, but only in cates imvovng multisle counties.” + atonal authrties ae the eultrs where ony a ions! wmaritiafeces Tt bes + The Ucommisionooks ta requis mergers and scqustions Incioaigforen merges they seem ovezeer stn Irpecment ts efortve competion tna the £0 + regulates ‘tate ai’ or ubsiiesoflered to Companies orto fvvel EU Policy and The euro as a common currency. ADVANTAGES Pe 7 1€ + the capital market will provide a greater range of investment options to individuals and mec institutions University College of isiamsbad fZ23 5 Prepared by z Dr. Catalina Alliende for MCG aes \ 3 5.5 Regional integration in Europe + Whatis the name of the European common currency? + EURO =| 5.5 Regional integration in Europe [| 5.5 Regional integration in Europe + £U Policy and The euro as a common currency. Tale Meade and dstanages oligo wr + Individual countries lose control over monetary ‘policy. + The EU is not an optimal currency area 1 Feta es ns | Ure imate mney + BUis not an area where similarities in the Fa ren campers 1 Unt ta pkg oy a pe ic activities that 1 Rescind ar ik Oricon non and 1 rosea dca ertacstes use a single exchange rate as an instrument of ‘macro-economic policy. alee