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The major merits and drawbacks of regional integration
Role of regional integration in promoting global business
Regional integration with Caribbean countries
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Regional Integration is when an economic alliance or trade agreement is formed among countries that are located geographically close to one another. This paper analyzes the role of regional integration in promoting global business, discusses the advantages and disadvantages of regional integration using a trading block as an example, and compares the economic development stages of two countries within a chosen region and discusses the ramifications of the region’s economic development for global business.
The purpose of regional integration is to achieve economic gains through free trade flow and investments between neighboring countries often by lowering or eliminating tariffs against imports from fellow member countries. Another purpose to the integration is to create institutions responsible for policy formulation concerning issues like education, health, labor matters and foreign policy within the member nations. These actions increase duty free trade, tourism, movement of labor, and the flow of capital across national borders, reducing the possibility of conflict.
Regional integration promotes global business in that it removes in stages or all together, previous barriers to foreign investments and other business ventures. As long as the policies set forth by the regional trade bloc are followed, businesses within each member country are encourages to participate in business activities such as forming strategic alliances, licensing, exporting, and relocating operations to other countries within the regional block to name a few. Businesses looking to expand globally have the opportunity to reduce productions costs through actions such as setting up manufacturing operations in another country where they would have access to...
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...tions to follow suit with reforms and bring the Caribbean to a standing as a major regional trading block.
References
Buddan R. The People's National Party's Manifesto: Vision and Planning. (August 19,2007) Retrieved March 8, 2008 from, http://jamaica-gleaner.com/gleaner/20070819/focus/focus3.html
Hill, C.W.L. (2004). International Business: Competing in the Global Marketplace (5th Ed.). New York: McGraw-Hill.
The Caribbean Community and Common Market. Retrieved March 7, 2008 from, http://www-old.itcilo.org/actrav/actrav-english/telearn/global/ilo/blokit/caricom.htm
The World Fact Book: Jamaica. Retrieved March 9, 2008 from, https://www.cia.gov/library/publications/the-world-factbook/geos/jm.html
Trinidad and Tobago: Economic Development. Retrieved March 9, 2008 from, http://www.nationsencyclopedia.com/Americas/Trinidad-and-Tobago-ECONOMIC-DEVELOPMENT.html
In conclusion, economic integration and economic globalization help reduce the probability of interstate belligerency because war negatively impacts the markets and investments, post World War reconstruction helps build stronger economies and lastly, countries would rather focus on specialization than war. In addition, economic integration and economic globalization help the economy grow and expand. These points show that war and conflict is decreasing because countries that are economically integrated prefer to free trade without any restrictions. As a result, markets increase since countries have more access to trade and that leads to an increase in globalization, whereas war would put the countries’ economies at risk.
Economic integration is the joining of economic policies between different states/regions. This eliminates tariff and non-tariff barriers to the flow of goods, services and factors of production between the regions. Economic integration has varying levels referred to as trading blocs; these are a form economic integration. A trading bloc is a group of nations that have been made a bilateral or multilateral agreement. There are four types of trading blocs. The least advanced level is the Free Trade Area. The features of this level is that reduced tariff barriers between signatories, which at times are abandoned altogether and there is free movement of labour and capital and the non-member countries have an independent set of tariffs against member countries. The second level of economic integration is the Customs Union. This is a Free Trade Agreement plus a common external tariff. Member countries agree to reduce tariff barriers among themselves and they have in common, this is referred to as tax harmonisation. The Common Market is the third level of trade blocs. This has features of the Customs Union plus free movement of capital and labour and some policy harmonisation such as similar trade policies to prevent certain member countries having an unfair advantage. The European Union is an example of a Common Market and is an economic and political partnership that involves 28 European countries. It allows goods and people to be moved around and has its own currency, the euro, which is used by nineteen of the member countries (The UK excluded). It also has its own parliament and sets rules in a wide range of areas such as transport,...
The IMF representative in the clip claims that, “They needed to expand their exports and diminish their imports and the best way of doing that is to make foreign currency more expensive.” Whether done intentionally or not, the only economies that seemed to have prospered from this new relationship and reduced trade barriers are those countries that are already economically sufficient. Judging from the negative effects that befell Jamaica when it reduced its trade barriers, it could be concluded developed countries were looking for new markets to import their goods and set their eyes on Jamaica, a tiny country that they could easily intimidate into submission. In the video clip, vendors complained about the large amounts of foreign fruits and vegetables that were now in their market and stated that these imports were hurting their businesses. While local farmers are failing to find a market for their produce, foreign countries have found a market for their exports in the local supermarkets. As mentioned in the video clip, supermarkets seemed to be doing well with the overseas produce because they are being sold for less than the local produce. The reduction of trade barriers has introduced a new competitor to Jamaican markets that mirrors
(q) Contribute to hemispheric integration and the fulfillment of the objectives of the Free Trade Area of the Americas (http://www.
Mountain ranges divide the Dominican Republic into three regions, Northern, Central, and Southwestern. There are seven major drainage b...
Much of the political case for regional economic integration stems from national security. Another case study provided by Hill is the European Union. The nation states of Western Europe bonded together in an effort to deal with the political giants of the USSR to the east and the USA to the west. Further, regional economic integration can facilitate political harmony between nations due to their increased level of
The political force moved away from the painstakingly and time-consuming technique of multilateral tariff negotiations to smaller regional and bilateral provisions - the Regional Trade Agreement. In these arrangements; members accord preferential treatment , basically agreeing to liberalize the exchange of goods and services amongst each another giving regard to certain trade barriers. RTA is not the first-hand way of trade liberalization though. Initially, when multilateral trade discussions used to happen, two-sided and multiparty FTA”s filled the vacuum. There were restrictions from stringent and premeditated trade arrangements earlier, thus a lot of states are now moving towards freer trade for their own benefits.
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
CAFTA, the Central America Free Trade Agreement, or commonly known as the Dominican RepublicCentral America Free Trade Agreement (DR-CAFTA), is a free trade agreement. In international trade, free trade is an idealized market model, often stated as a political objective, in which trade of goods and services between countries are not hindered by government imposed tariffs (taxes on imports) or non-tariffs (Wikipedia, 2007).
Regional economic integration enhances political cooperation. Several group of nation can have significantly greater political influence than each nation would have by individually. This integration is an essential strategy to address the effects or issues of conflicts and political instability that may affect the region. Improved political cooperation due to regional economic integration is also useful tool to handle the social and economic challenges associated with globalization. Countries which are link together will be more dependent on each other that will reduce the likelihood of violent conflict between each nation. This integration will also give countries greater political clout when dealing
The Caribbean countries are not taking this lightly. Fortunately they are bringing together intelligence and police forces as well as customs experts in order to combat the problem. However, the article goes on to mention that these are impoverished countries battling against wealthy crime organizations. Who has more power? Along those same lines, an additional cause for concern is the possibility that these same crime organizations may seek political positions or strong-arm Caribbean country governments so that they can effectively operation without much interference. Many members of these crime organizations have been educated in crime in the north and have been deported back to their homelands. This makes for far more sophisticated criminals than their local counterparts. Jamaican authorities say that a great deal of their criminal activity and high per capita murder rate is solely attributed to the problem of deportees.
The case for regional integration is both simple and irrefutable. First we are small and we need to achieve economies of scale. We need to achieve such economies in markets, production, the mobilisation of regional capital for regional use, university education, science and technology, sea and air transport to mention some areas.
different parts of the world. In India, there is a great diversity which exists in the socio- economic and regional backwardness.
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.