lOMoARcPSD|13076373

Lesson 4 - Market Integration

The Contemporary World (Negros Oriental State University)

StuDocu is not sponsored or endorsed by any college or university

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)
 lOMoARcPSD|13076373

Market
Integration
The Contemporary World

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

TOPICS

INTEGRATION FREE TRADE

AREAS
UNIONS

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

Market
Integration
● how easily two or markets can trade with
each other
● a situation in which separate markets for
the same product become one single market

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

INTEGRATION
denotes a state of affairs or
process involving attempts
to combine separate
national economies into
larger economic regions

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

…INTEGRATION

HIGH INTEGRATION FOREIGN TRADE

● low barriers to trade ● helps the integration of markets
● prices are similar in these because it reduces barriers to trade
markets and increases fluidity between
markets.
LOW INTEGRATION ECONOMIC INTEGRATION
● high barriers to trade ● unification of economic policies
● prices fluctuate between between different states, through
these markets the partial or full abolition of tariff
and non-tariff restrictions on trade

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

TRADE AGREEMENTS/ TRADE PACTS

PREFERENTIAL TRADE AGREEMENT
● wide-ranging taxes, ● trading bloc that gives preferential access to
tariff, and trade treaty certain products from the participating countries,
that includes investment reducing tariffs but not abolishing them
completely
guarantees
● 2 or more countries
FREE TRADE AGREEMENT
agree on terms that
helps them trade with ● a form of trade pacts that determine the
tariffs and duties that countries impose on imports
each other and exports with the goal of reducing and
eliminating trade barriers, encouraging
international trade

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

FREE TRADE
• a trade policy that does not restrict imports or exports
• international trade is left to its natural course without tariffs
and non-tariff trade barriers

a. Tariffs – taxes or duties to be paid on a particular class of

imports and exports
b. Non- Tariff Barriers – import licensing, rules for valuation of
goods at customs, pre-shipment inspections, trade prepared
investment measures (quotas, subsidies, customs delays,
technical barriers)

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

FREE TRADE AREA

• is the region encompassing a trade bloc whose member
countries have signed a free trade agreement (FTA)
• a group of countries which tariffs and non-tariff
barriers between the members are generally abolished
but with no common trade policy toward non-
members (exclusivity)
• both in the sense of geography and price

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

➢ free trade between

NAFTA
Canada, The US, and
Mexico
➢ eliminated tariffs on
agriculture, textiles, and
automobiles
➢ encourage economic
activity among North
America’s three major
economic powers

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

➢ free trade of ASEAN

AFTA
supporting local trade and
manufacturing in all ASEAN
countries
➢ increase ASEAN’s competitive
edge as a production base in
the world market
➢ to attract more foreign direct
investment to ASEAN

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

UNIONS
CUSTOMS UNION
● composed of a free trade area with a common
external tariff to the rest of the world
● establishes a closer political and cultural ties
between the member countries
● economic efficiency
ECONOMIC UNION
● an agreement between two or more nations to
allow the freedom of movement of goods, services,
and the factors of production (capital and labor)
and external trade policy

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

EUROPEAN UNION
• political and economic union
of 27 member states that
are located in Europe
• developed an internal single
market through a
standardized system of laws
that apply in all member
states, where members
agreed to act as one

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

EUROPEAN UNION
• seeks to guarantee the free
movement of goods, capital,
services, and labor
• passport controls have been
abolished for travel within the
Schengen Area
• use of the Euro currency

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

BREXIT
• referring to the UK’s decision in June 2016 referendum
to leave the EU
• 52% voted to leave, and 48% voted to remain
• will still remain subject to the EU law and remains part
of the customs union and single market during the
transition but is no longer part of the EU’s political
bodies/institutions

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

WHAT WILL HAPPEN?

• regulations could make it harder to move goods across the
English Channel
• multinational corporations who are headquartered in London,
might move their European headquarters inside the EU which
could lead to job losses
• problem with EU migrants

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)

 lOMoARcPSD|13076373

END OF PRESENTATION

Downloaded by Santos, Allyana Mari - AB POLSCI 1A (santosallyanamarie@gmail.com)