PPT5 - Global and Regional Economic Cooperation and Integration

Global and Regional
ECONOMIC COOPERATION
AND INTEGRATION
Global and Regional Economic
Module 5
Cooperation and Integration
CONTENTS
2 3 4 5 6 7
VISION EDUCATION WORK
ABOUT ME SKILLS
AND MISSION Major Areas
BACKGROUND EXPERIENCE
of Regional
International Regional Regional Economic
8
Trade
Barriers
9 10
Economic
Integration
11
Agreement 12 Integration
FREELANCE
EXPERIENCE
MY PROJECT MY PROJECT CONTACT END and
Cooperation
Module 5
International Trade
Barriers
CONTACT END
Module 5
INTERNATIONAL TRADE BARRIERS

Trade Barriers may be:
1. TARIFFS 2. NON-TARIFFS
3. NATURAL
Module 5
TARIFF
• A system of government-imposed duties levied on imported or exported
goods; a list of such duties, or the duties themselves.
• A tariff is a tax imposed by a nation on imported goods. It may be a charge per

unit, such as per barrel of oil or per new car; it may be a percentage of the
value of the goods, such as 5 percent of a $500,000 shipment of shoes; or it
may be a combination.
CONTACT END
Module 5
NON-TARIFF BARRIERS
A. Import Export B. Import Quota C. Export subsidy
Licenses
3
ABOUT ME 4
VISION
AND MISSION
5SKILLS 6
EDUCATION
BACKGROUND
7
WORK
EXPERIENCE
•Identifies what •Limits on the quantity •Can be used to give

products are shipped of a certain good that an advantage to a
or delivered between can be imported to domestic producer
8 international
locations.
FREELANCE
9 10
protect
certain industries.11
CONTACT 12
over a foreign
END producer.
MY PROJECT MY PROJECT CONTACT END

EXPERIENCE
Module 5
NON-TARIFF BARRIERS
D. Voluntary Export E. Local content F. Embargo
3
Restraints (VERs)
ABOUT ME 4
requirements (LCRs)
VISION
AND MISSION
5
SKILLS 6
EDUCATION
BACKGROUND
7
WORK
EXPERIENCE
•A restriction set by a • Policy measures that •A total ban on

government on the typically require a imports or exports of a
quantity of goods that certain percentage of product.
8 9
can be exported out of
a country during a
specified period of
FREELANCE
10intermediate
11
goods
used in the production
processes to
CONTACT
be
END 12
time. MY PROJECT MY PROJECT
sourced CONTACT
from END
EXPERIENCE
domestic
manufacturers.
Module 5
INTERNATIONAL TRADE BARRIERS

Natural barriers:
1. CAN BE EITHER PHYSICAL OR

3. LANGUAGE
CULTURAL
2. DISTANCE 4. CULTURE
Module 5
Regional Economic
Integration
CONTACT END
Module 5
REGIONAL ECONOMIC INTEGRATION

Four Main Types of Regional Economic Integration
1. FREE TRADE AREA 3. COMMON MARKET
2. CUSTOMS UNION 4. ECONOMIC UNION

Module 5
Free Trade Area Customs Union
•Member countries remove all barriers to •This type provides for economic
trade between themselves but are free to cooperation as in a free-trade zone.
independently determine trade policies •Barriers to trade are removed between
with nonmember nations. member countries.
Example: North American Free Trade Example: The Gulf Cooperation Council
Agreement (NAFTA). (GCC) Cooperation Council for the Arab
States of the Gulf
Module 5
Common Market Economic Union
•This type allows for the creation of •Created when countries enter into an
economically integrated markets economic agreement to remove barriers
between member countries. Trade to trade and adopt common economic
barriers are removed, as are any policies.
restrictions on the movement of labor
and capital between member countries.
Example: Common Market for Eastern Example: European Union (EU)

and Southern Africa (COMESA).
Module 5
Regional Agreement
CONTACT END
Module 5
REGIONAL AGREEMENTS PROS

A. Trade Creation B. Employment C. Consensus and
3
ABOUT ME 4 Opportunities
VISION
AND MISSION
5SKILLS 6 Cooperation
EDUCATION
BACKGROUND
7
WORK
EXPERIENCE
•Create more •By removing •Member nations may

opportunities for restrictions on labor find it easier to agree
countries to trade with movement, economic with smaller numbers
8 one
to
FREELANCE
another
trade
9 by
removing the barriers
and
10expand
opportunities.
11
integration can help
job
CONTACT 12
of countries. Regional
END understanding and
similarities may also
investment. MY PROJECT MY PROJECT CONTACT END
facilitate closer
EXPERIENCE
political cooperation.
Module 5
REGIONAL AGREEMENTS CONS

A. Trade Diversion B. Employment Shifts C. Loss of National
3
ABOUT ME 4 and Reductions
VISION
AND MISSION
5
SKILLS 6 Sovereignty
EDUCATION
BACKGROUND
7
WORK
EXPERIENCE
Member countries Countries may move With each new round

may trade more with production to cheaper of discussions and
each other than with labor markets in agreements within a
8
FREELANCE
9
nonmember nations.
10
member countries.
11
CONTACT 12
regional bloc, nations
END may find that they
have to give up more
of their political and
EXPERIENCE
economic rights.
Module 5
Major Areas of Regional

Economic Integration and
Cooperation
CONTACT END
Module 5
NAFTA
•The North American Free Trade Agreement (NAFTA) came into being during a
period when free trade and trading blocs were popular and positively perceived
•Goal - to encourage trade between Canada, the United States, and Mexico.
Reduce tariffs and trade barriers to create a free-trade zone where
companies can benefit from the transfer of goods.
CONTACT END
Module 5
•Member countries can establish their own trading rules for nonmember
countries. NAFTA’s rules ensure that a foreign exporter won’t just ship to the
NAFTA country with the lowest tariff for nonmember countries.
•Requires that at least 50 percent of the net cost of most products must come
from or be incurred in the NAFTA region.
Canadian and US consumers have benefited from the lower-cost Mexican

agricultural products. Similarly, Canadian and US companies have sought to
CONTACT END
enter the expanding Mexican domestic market.
Module 5
GATT
The General Agreement on Tariffs and Trade
A series of rules governing trade
created in 1947 by twenty-three countries;
Australia, Belgium, Brazil, Burma, Canada, Ceylon, Chile, China, Cuba,
Czechoslovakia, France, India, Lebanon, Luxembourg, Netherlands, New
Zealand, Norway, Pakistan, Southern Rhodesia, Syria, South Africa, United
Kingdom and the United States.
CONTACT END
By the time it was replaced with the WTO, there were 125 member nations.
“Trade should be free and equal”
Initial focus was on tariffs, which are taxes placed on imports or exports.
Module 5
CAFTA-DR
The Dominican Republic–Central America–United States Free Trade Agreement
(CAFTA-DR) then called the Central America Free Trade Agreement, or (CAFTA)
A free trade agreement signed in 2005.
Originally, the agreement was between the US and the Central American
countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua.
A year before the official signing, the Dominican Republic joined the
negotiations, and the agreement was renamed CAFTA-DR
CONTACT END
80 percent of goods exported from the United States into the region are no
longer subject to tariffs.
Module 5
EUROPEAN UNION (EU)

The most integrated form of economic cooperation.
Originally began in 1950 to end the frequent wars between neighboring
countries in the Europe.
Six founding nations:
France
West Germany
Italy
CONTACT END
Belgium
Luxembourg
Netherlands
Module 5
CHALLENGES AND OPPORTUNITIES (EU)

The biggest advantage : Monetary union.
Euro is the official currency of 20 out of 27 European Union countries which
collectively make up the euro area, also known as the eurozone
Euro is the world’s second-largest reserve currency behind the US dollar.
EU members formed a single market with more than 500 million people (7% of
the world’s population). This single market permits the free flow of goods,
service, capital, and people within the EU. CONTACT END
Module 5
ASEAN
The Association of Southeast Asian Nations
Created in August 08, 1967 by five founding-member countries:
Malaysia Thailand
Indonesia Singapore
Philippines
Since inception, Myanmar (Burma), Vietnam, Cambodia, Laos, and Brunei
have joined the association.
Primary focus is on economic, social, cultural,
CONTACT
and technical
END
cooperation as
well as promoting regional peace and stability.
Module 5
APEC
Asia–Pacific Economic Cooperation
founded in 1989 by 12 countries as an informal forum.
It now has twenty-one member economies on both sides of the Pacific Ocean.
The only regional trading group that uses the term member economies, rather
than countries, in deference to China. Taiwan was allowed to join the forum,
but only under the name Chinese Taipei.
Focused primarily on economic growth and cooperation, the regional group
has met with success in liberalizing and promoting free trade as well as
CONTACT END
facilitating business, economic, and technical cooperation between member
economies.
Module 5
TRADE AGREEMENTS AND EFFORTS

IMPACT BUSINESS
3
ABOUT ME 4
VISION
AND MISSION
5
SKILLS 6
EDUCATION
BACKGROUND
7
WORK
EXPERIENCE
Consistent Reduced “rules”

criteria for barriers to for their
8 9
investment
FREELANCE and trade
10 11
entry. CONTACT END 12 industry
change
EXPERIENCE
Module 5
THE UNITED NATIONS (UN) AND PEACE:

IMPACT ON GLOBAL TRADE
After World War II destroyed nations, resources, and the balance of peace,
A shift in thinking toward trade-increasing trade for the benefit of all.

Nations were eager for a new model that would not only focus on promoting
and expanding free trade but would also contribute to world peace by
creating international economic, political,
CONTACT andENDsocial cooperative
agreements and institutions to support them.
Module 5
THE UNITED NATIONS (UN) AND PEACE:

IMPACT ON GLOBAL TRADE
International agreements and institutions have succeeded—at a minimum—
in creating an ongoing forum for dialogue on trade and related issues.
Reduce the barriers to trade
Expand global and regional cooperation have functioned as flatteners in an
increasingly flat world.
The United Nations became a key globalCONTACT
institution and
END impact free and fair
global trade.
Module 5
THE UNITED NATIONS (UN) AS A

BUSINESS PARTNER
While certain industries (e.g., defense companies) benefit from conflict, in
general global firms prosper best in peaceful times.
The primary impact for businesses is in the areas of staffing, operations,
regulations, and currency convertibility and financial management.
The six main bodies of the UN are the (1) Secretariat, (2) Security Council,
(3)General Assembly, (4) Economic and Social Council,
CONTACT END (5) International
Court of Justice, and (6) UN Trusteeship Council. The Secretary-General
leads the UN.
Module 5
THE INTERNATIONAL MONETARY

SYSTEM
The gold standard provided a stable means for countries to exchange their currencies
and facilitate trade.
The Bretton Woods system established a new monetary system based on the US dollar.
The Bretton Woods system lasted until 1971 and provided the longest formal mechanism
for an exchange-rate system and forums for countries to cooperate on coordinating
policy and navigating temporary economic crises.
No new formal system has replaced Bretton Woods, some of its key elements have
endured, including a modified managed floatCONTACT END
of foreign exchange, the International
Monetary Fund (IMF), and the World Bank.
Module 5
Thank You
CONTACT END

PPT5 - Global and Regional Economic Cooperation and Integration

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PPT5 - Global and Regional Economic Cooperation and Integration

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Global and Regional

INTERNATIONAL TRADE BARRIERS

• A tariff is a tax imposed by a nation on imported goods. It may be a charge per

•Identifies what •Limits on the quantity •Can be used to give

MY PROJECT MY PROJECT CONTACT END

•A restriction set by a • Policy measures that •A total ban on

INTERNATIONAL TRADE BARRIERS

1. CAN BE EITHER PHYSICAL OR

REGIONAL ECONOMIC INTEGRATION

1. FREE TRADE AREA 3. COMMON MARKET

2. CUSTOMS UNION 4. ECONOMIC UNION

Free Trade Area Customs Union

Common Market Economic Union

Example: Common Market for Eastern Example: European Union (EU)

REGIONAL AGREEMENTS PROS

•Create more •By removing •Member nations may

REGIONAL AGREEMENTS CONS

Member countries Countries may move With each new round

Major Areas of Regional

Canadian and US consumers have benefited from the lower-cost Mexican

EUROPEAN UNION (EU)

CHALLENGES AND OPPORTUNITIES (EU)

TRADE AGREEMENTS AND EFFORTS

Consistent Reduced “rules”

THE UNITED NATIONS (UN) AND PEACE:

A shift in thinking toward trade-increasing trade for the benefit of all.

THE UNITED NATIONS (UN) AND PEACE:

THE UNITED NATIONS (UN) AS A

THE INTERNATIONAL MONETARY

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