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Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade.

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Presentation on theme: "Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade."— Presentation transcript:

1 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

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3 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

4 Introduction International Trade & the World Economy;  Charles van Marrewijk Jacob Viner ( )

5 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

6 Types of regional economic integration International Trade & the World Economy;  Charles van Marrewijk Preferential trade agreement (PTA); ACP countries Free trade area (FTA); EFTA, NAFTA Customs union; EEC Common market; EU Economic union; EMU

7 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

8 Neo-classical theory of economic integration International Trade & the World Economy;  Charles van Marrewijk Trade creation

9 Neo-classical theory of economic integration International Trade & the World Economy;  Charles van Marrewijk Trade diversion

10 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

11 Regional trade agreements International Trade & the World Economy;  Charles van Marrewijk COMESA countries

12 Regional trade agreements International Trade & the World Economy;  Charles van Marrewijk ASEAN countries

13 Regional trade agreements International Trade & the World Economy;  Charles van Marrewijk

14 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

15 Regionalism and the new trade theory International Trade & the World Economy;  Charles van Marrewijk Using a Dixit-Stiglitz type model with the world consisting of many provinces which may form b trading blocs, welfare is non-monotonic

16 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

17 Europe and the European Union International Trade & the World Economy;  Charles van Marrewijk

18 Europe and the European Union International Trade & the World Economy;  Charles van Marrewijk Establishing a common market (EEC treaty) with four freedoms: Free movement of goods (Cassis-de-Dijon case, 1979). Free movement of persons Free movement of services Free movement of capital The main institutions of the European Union are: The Council of the European Union The European Commission; The European Parliament; The European Court of Justice The European Central Bank (ECB)

19 Europe and the European Union International Trade & the World Economy;  Charles van Marrewijk Green circle: former EFTA Red star: potential EU member

20 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

21 Future enlargement of the European Union International Trade & the World Economy;  Charles van Marrewijk

22 Future enlargement of the European Union International Trade & the World Economy;  Charles van Marrewijk

23 Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions CHAPTER 13; ECONOMIC INTEGRATION International Trade & the World Economy;  Charles van Marrewijk

24 Conclusions International Trade & the World Economy;  Charles van Marrewijk There are many regional trade agreements (RTAs) in the world. We also distinguish FTAs, customs union, common market, economic union. RTAs in general increase welfare through trade creation, but the discriminatory nature of an RTA may make the net welfare effect negative. Increased popularity of Regionalism rather than Multilateralism may be bad for the world economy. EU is most succesful and powerful economic integration scheme; many CEE countries want to join; EU’s political decision process needs to be revised.


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