World Library  
Flag as Inappropriate
Email this Article

National Cooperation And Agreements

Article Id: WHEBN0023481981
Reproduction Date:

Title: National Cooperation And Agreements  
Author: World Heritage Encyclopedia
Language: English
Subject: International business
Collection:
Publisher: World Heritage Encyclopedia
Publication
Date:
 

National Cooperation And Agreements

Integration is a political and economic agreement among countries that gives preference to member countries to the agreement.[1] General integration can be achieved in three different approachable ways: through the European Union (EU) and the North American Free Trade Agreement (NAFTA). Indeed, factors of mobility like capital, technology and labour are indicating strategies for cross-national integration along with those mentioned above.

The World Trade Organization

The WTO is one of the most effective trade agreements among nations. The WTO replaced the General Agreement on Tariffs and Trade (GATT) in 1995 and has 125 member nations.currently 153 member are part of WTO. Many believe GATT initiated rampant liberalization in trade in 1947 and its move contributed to the expansion of trade all over the world by eliminating tariff and quotas. Moreover, WTO continued GATT's principle with more multilateral forum, which enables governments to settle agreements or to dispute them regarding trade.

Rapid growth of trade among nations has forced the agreement to be acknowledged as a fundamental basis for the member nations to follow certain rules and regulations as the signatories of the agreement. As a result, WTO expanded its mission to include trade in services, investments, intellectual property, sanitary measures, plant health, agriculture, and textiles, as well as technical baariers to trade.[3]

The European Union (EU)

The largest and most comprehensive regional economic group is the EU. It began as a free trade agreement with the goal to become a customs union and to integrate in other ways. The formation of the European Parliament and the establishment of a Euro the common currency make EU the most ambitious in comparison to other regional trade groups.[2] It progressed from being the European Economic Community (EEC) to the European Community (EC) to finally the European Union. Iceland, Liechtenstein, Norway, and Switzerland who decided not to leave European Free Trade Area are linked together with the EU as a customs union.[3] The EU comprises 27 countries, including 12 countries from mostly Central and Eastern Europe that joined since 2004. The EU abolished trade barriers on intra-zonal trade, instituted a common external tariff, created a common currency, the euro.[3]

The implications of the EU for corporate strategy are:

  • Companies need to determine where to produce products.
  • Companies need to determine what their entry strategy will be.
  • Companies need to balance the commonness of the EU with national differences.[3]

North American Free Trade Agreement (NAFTA)

NAFTA is designed to eliminate tariff barriers and liberalize investment opportunities and trade in services. NAFTA includes Canada, Mexico, and the United States, where went into effect in 1994. The United States and Canada historically have had various forms of mutual economic cooperation. They signed the Canada-United States Free Trade Agreement effective January 1, 1989, which eliminated all tariffs on bilateral trade by January 1, 1998. In February 1991, Mexico approached the United States to establish a free trade agreement. The formal negotiations that began in June 1991 included Canada. The resulting North American Free Trade Agreement became effective on January 1, 1994.[3]

The key provisions in NAFTA are:

  • the harmonization of trade rules,
  • the liberalization of restrictions on services and foreign investment,
  • the enforcement of intellectual property rights,
  • a dispute settlement process,
  • regional labour laws and standards, and
  • strengthened environmental standards.[3]

Regional economic integration in the Americas

There are six major regional economic groups in the Americas and they can be further divided into Central America and South America. The major reason for these different groups in Central and South America entering into collaboration was market size.[3] The Caribbean Community and Common Market (CARICOM) and the Central American Common Market (CACM) are both found in Central America. The two major blocs in South America are the Andean Community (CAN) and the Southern Common Market (MERCOSUR) which is the major trade group. MERCOSUR comprises Brazil, Argentina, Paraguay, and Uruguay. It generates 75 percent of South America’s GDP and this makes MERCOSUR the fourth largest trading bloc in the world after the EU, NAFTA, and the Association of Southeast Asian Nations (ASEAN).[3]

Regional economic integration in Asia

Regional economic integration has not been as successful in Asia as in the EU or NAFTA because most Asian countries have relied on U.S. and European markets for their exports.[3] The Association of Southeast Asian Nations (ASEAN), formed in 1967, consisted of the following countries: Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, and Vietnam. The ASEAN Free Trade Area (AFTA), formed officially in 1993, was for the purpose of cutting tariffs on inter-regional trade to a maximum of 5% by 2008.[3] ASEAN is the third largest free trade agreement in the world after the EU and NAFTA and above MERCOSUR. The Asia Pacific Economic Cooperation (APEC), founded in 1989, was to promote multilateral economic cooperation in trade and investment in the Pacific Rim.[4] APEC is composed of 21 countries that border the Pacific Rim; progress toward free trade is hampered by size and geographic distance between member countries and the lack of a treaty.

Regional economic integration in Africa

There are several regional trade groups in Africa that are registered with the WTO, including:

Created in 2002 by 53 African nations, the [3]

Notes

  1. ^ Daniels, John D. , Lee H. Radebaugh, and Daniel P Sullivan. International Business: Environment and Operations. NJ: Prentice Hall, 2009.
  2. ^ a b Daniels, John D., Lee H. Radebaugh, and Daniel P Sullivan. International Business: Environment and Operations. NJ: Prentice Hall, 2009
  3. ^ a b c d e f g h i j k l Daniels, J., Radebaugh, L., Sullivan, D. (2007). International Business: environment and operations, 11th edition. Prentice Hall. ISBN 0-13-186942-6
  4. ^ http://www.apecsec.org.sg/apec/about_apec.html
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and USA.gov, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for USA.gov and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
 
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
 
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.
 


Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.