Multinational Market

and Market Regions

Multinational Market Regions

- those groups of countries that seek mutual economic

benefit from reducing trade and tariff barriers
Definition

• Free trade area An agreement between two or more countries to

reduce or elimine) customs duties and nontariff trade barriers among
partner countries while members maintain individual tariff schedules
for external countries.
• Customs union Enjoys free trade area's reduced or eliminated internal
tariffs and adds a common external tariff on products imported from
countries outside the union
Definition

• Common market - Eliminates all tariffs and other restrictions on

internal trade, adopts a set of common external tariffs, and removes all
restrictions on the free flow of capital and labor among member
nations.
• Political union Involves complete political and economic integration,
either voluntary or enforced.
Commonwealth - a voluntary organization providing for the loosest
possible relationship that can be classified as economic integration. Two
new political unions came into existence in the 1990s: The
Commonwealth of Independent States (CIS) The European Union (EU)
Elaborate the problems and benefits that multinational
market groups represent for international marketers

• It is easier for the international marketer to deal with a greater and

more uniform market, rather than being troubled by all kinds of
peculiar tariffs and restrictions of smaller markets (i.e., nations). A
multinational market group, by specialization and keener cooperation,
gains a higher economic base. Thus a higher standard of living is
established. The inhabitants will then have more purchasing power,
creating a demand for more goods; therefore, a market for outside
imports will be created
Explain the political role of multinational market groups.

• Political amenability among countries is another basic

requisite for development of a supranational market
arrangement. Participating countries must have comparable
aspirations and general compatibility before surrendering any
part of their national sovereignty. State sovereignty is one of
the most cherished possessions of any nation and is
relinquished only for a promise of significant improvement of
the national position through cooperation
Regional Integration in Economics

• Regional economic integration occurs when countries come together to

form free trade areas or customs unions, offering members
preferential trade access to each others' markets. 
• In economics, regional economic integration is a particular case of
international economics and monetary economics. 
What is the motive behind ASEAN+3

• strengthening and deepening East Asia cooperation at

various levels and in various areas, including energy,
transport, and information and communications technology
(ICT). ASEAN agreed to strengthen partnership with 
the People’s Republic of China (PRC), the Republic of Korea
 (Korea) and Japan to address mutual issues and concerns in
energy security, natural gas development, oil market
studies, oil stockpiling, and renewable energy.
What are the probable implications for global
trade?

• International trade allows countries to expand their

markets and access goods and services that otherwise may
not have been available domestically. As a result of
international trade, the market is more competitive. This
ultimately results in more competitive pricing and brings a
cheaper product home to the consumer.
Thank you!