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Copyright © 2011 Pearson Education 8-1 International Business Environments and Operations, 13/e Global Edition Part Three Theories and Institutions: Trade and Investment
Copyright © 2011 Pearson Education 8-2 Chapter 8 Cross- National Cooperation and Agreements
Copyright © 2011 Pearson Education 8-3 Chapter Objectives To identify the major challenges of the World Trade Organization To discuss the pros and cons of global, bilateral, and regional integration To describe the static and dynamic impact of trade agreements on trade and investment flows To define different forms of regional economic integration To compare and contrast different regional trading groups, including but not exclusively the European Union (EU), the North American Free Trade Agreement (NAFTA), the Southern Common Market (MERCOSUR), and the Association of Southeast Asian Nations (ASEAN) To describe other forms of global cooperation such as the United Nations and the Organization of the Petroleum Exporting Countries (OPEC)
Copyright © 2011 Pearson Education 8-4 Economic Integration Approaches to economic integration may be: Bilateral integration- two countries cooperate closely, usually in the form of tariff reductions. Regional integration- a group of countries located in the same geographic proximity decide to cooperate, i.e. the European Union. Global integration- countries worldwide cooperate through the WTO.
Copyright © 2011 Pearson Education 8-5 The World Trade Organization GATT: Predecessor to the WTO Most Favored Nation Dispute Settlement The Rise of Bilateral Agreements
Copyright © 2011 Pearson Education 8-6 Regional Economic Integration Regional trade agreements—integration confined to a region and involving more than two countries. Geographic proximity is an important reason for economic integration.
Copyright © 2011 Pearson Education 8-7 Major Types of Economic Integration Free trade area—no internal tariffs. Customs union—no internal tariffs plus common external tariffs. Common market—customs union plus factor mobility.
Copyright © 2011 Pearson Education 8-8 Effects of Integration Static Effects Dynamic Effects Trade Creation Trade Diversion Economies of Scale Increased Competition
Copyright © 2011 Pearson Education 8-9 Major Regional Trading Groups European Union North American Free Trade Agreement The Americas: CARICOM, MERCOSUR, CAN, LAIA ASEAN APEC The African Union
Copyright © 2011 Pearson Education 8-10 European Union Predecessors Organizational Structure The Single European Act Monetary Union Expansion Bilateral Agreements
Copyright © 2011 Pearson Education 8-11 How to Do Business with the EU: Implications for Corporate Strategy 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.
Copyright © 2011 Pearson Education 8-12 North American Free Trade Agreement Includes Canada, the United States, and Mexico. Went into effect on January 1, 1994. Involves free trade in goods, services, and investment. Is a large trading bloc but includes countries of different sizes and wealth.
Copyright © 2011 Pearson Education 8-13 NAFTA Rational U.S.-Canadian trade is the largest bilateral trade in the world. The United States is Mexico’s and Canada’s largest trading partner.
Copyright © 2011 Pearson Education 8-14 Rules of Origin and Regional Content Rules of origin-goods and services must originate in North America to get access to lower tariffs. Rules of Regional Content-50 % of the net cost of most products must come from the NAFTA region
Copyright © 2011 Pearson Education 8-15 Impact of NAFTA Wages, Investment, and Labor: An abundance of cheap labor and lax environmental standards has enticed U.S. companies to invest heavily in Mexico A major challenge to NAFTA is illegal immigration.
Copyright © 2011 Pearson Education 8-16 How to Do Business with NAFTA: Implications for Corporate Strategy Predictions and Outcomes –Companies would look at NAFTA as one big regional market –U.S. companies would run Canadian and Mexican companies out of business once the markets opened up –Mexico looked at as a consumer market rather than a production location
Copyright © 2011 Pearson Education 8-17 Regional Economic Integration in the Americas The Caribbean Community CARICOM MERCOSUR The Andean Community (CAN) Latin American Integration Association (LAIA)
Copyright © 2011 Pearson Education 8-18 Economic Integration in Central America and the Caribbean
Copyright © 2011 Pearson Education 8-19 Latin American Economic Integration
Copyright © 2011 Pearson Education 8-20 Regional Economic Integration in Asia Association of Southeast Asian Nations (ASEAN) Brunei Darussalam, Cambodia, China, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam
Copyright © 2011 Pearson Education 8-21
Copyright © 2011 Pearson Education 8-22 Calls for Closer Cooperation Asia Pacific Economic Cooperation (APEC) Challenges to Solidity –Lack of binding treaties Goal of “Open Regionalism” –Trade liberalization to non-APEC countries on an unconditional, MFN, or reciprocal basis
Copyright © 2011 Pearson Education 8-23 Regional Economic Integration in Africa There are several African trade groups, but they rely more on their former colonial owners and other developed markets for trade than they do on each other.
Copyright © 2011 Pearson Education 8-24 Future: Will the WTO Overcome Bilateral and Regional Integration Efforts? Regional integration might actually help the WTO achieve its objectives NAFTA and the EU will continue to develop stronger linkages and expand Regional integration in Africa will continue at a slow pace due to the existing political and economic problems there
Copyright © 2011 Pearson Education 8-25 Other Forms of International Cooperation The United Nations Nongovernmental Organizations (NGOs) Global Compact
Copyright © 2011 Pearson Education 8-26 Commodity Agreements Commodities-raw materials or primary products that enter into trade, such as metals or agricultural products. Many commodity agreements now exist for the purpose of: Discussing issues Disseminating information Improving product safety
Copyright © 2011 Pearson Education 8-27 Organization of Petroleum Exporting Countries (OPEC) Price Controls and Politics Output and Exports The Downside of High Prices
Copyright © 2011 Pearson Education 8-28 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America.
Copyright © 2011 Pearson Education, Inc. publishing as Prentice Hall 8-1 International Business Environments and Operations, 13/e Part Three Theories and.
Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall 8-1 International Business Environments & Operations 14e Daniels ● Radebaugh ● Sullivan.
8-1 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall International Business Part Three Theories and Institutions: Trade and Investment.
8-1 Copyright © 2009 Pearson Education, Inc. publishing as Prentice Hall Cross-National Cooperation and Agreements.
10-1 chapter 10 International Cooperation Among Nations International Business, 6th Edition Copyright 2010 Pearson Education, Inc. publishing as Prentice.
د. نايف أبو خلف. Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall.
1 Global Marketing Chapter 3 Regional Market Characteristics and Preferential Trade Agreements.
1 An Introduction to International Economics Second Edition Economic Integration Dominick Salvatore John Wiley & Sons, Inc. CHAPTER S E V E N.
4 chapter Business Essentials, 7 th Edition Ebert/Griffin © 2009 Pearson Education, Inc. The Global Context of Business Instructor Lecture PowerPoints.
© 2006 Pearson Education Canada Inc.Chapter Chapter 2 Competing in the Global Economy.
Regional Economic Integration Copyright © 2010 Pearson Education, Inc. publishing as Prentice Hall.
Knowledge Connections Definition Picture Term Vocabulary
International Business 9e By Charles W.L. Hill McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
International Business, 8th Edition Griffin & Pustay COPYRIGHT © 2015 PEARSON EDUCATION, INC. Chapter 10-1.
McGraw-Hill/Irwin © 2004 The McGraw-Hill Companies, Inc., All Rights Reserved. Regional Economic Integration.
5-1 International Business: Opportunities and Challenges in a Flattening World, 1e By Mason Carpenter and Sanjyot P. Dunung © Sanjyot Dunung 2011, published.
1 CHAPTER VIII REGIONAL ECONOMIC INTEGRATION INTERNATIONAL BUSINESS.
Copyright © Cengage Learning. All rights reserved.3| 1 Chapter Three Exploring Global Business.
© Prentice Hall, 2005Excellence in Business, Revised Edition Chapter Competing in the Global Economy.
Chapter 9 Economic Integration. Chapter 9 Regional economic integration Forms of economic integration Preferential trading agreement Free trade area (FTA)
Copyright © 2006 The McGraw-Hill Companies, Inc. All rights reserved The United Nations (UN) The UN is possibly the best- known worldwide organization.
Multinational Market Regions and Market Groups Chapter 10.
Copyright © Cengage Learning. All rights reserved. 3 | 1 The Extent of International Business Although the worldwide recessions of 1991, , and.
Chapter 8 Regional Economic Integration 1. Regional economic integration refers to –Agreements between countries in a geographic region to reduce tariff.
CHAPTER 9 REGIONAL ECONOMIC INTEGRATION. Agreements between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow.
Chapter 10 Business in a Global Economy Section 10.2 Global Competition.
John Wiley & Sons, Inc c GLOBAL ECONOMIC ENVIRONMENT Chapter Two.
Economic Integration. Introduction Three levels of economic integration Global: trade liberalization by GATT or WTO Regional: preferential treatment of.
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1 Regional Integration Regional trade agreements (RTAs) References Hill, C W “International Business” (6th edit., 2007), Chapter 9 Ball, D et al. “International.
© The McGraw Hill Companies, Inc., 2000 Ch.6: International Environment: Regional Political & Economic Integration.
Chapter 12: Trade Blocs and Trade Blocks. Trade Barriers Designed to Discriminate Trade blocs: Each member country can import from other member countries.
ECONOMIC INTEGRATION. Introduction: Economic integration around the world has been one of the most significant trends since world war two. The creation.
R EGIONALISM AND M ULTILATERALISM. 5 D IFFERENT DEGREES OF INTEGRATION 1. Preferential Trade Agreements : Ex: Caribbean Basin Initiative: US grants less-
Business in a Global Economy © 2014 Pearson Education, Inc. 4-1 chapter 4 Better Business 3rd Edition Solomon (Contributing Editor) · Poatsy · Martin.
What is the primary action that connects the world together? TRADE.
RegionalEconomicIntegration Free Trade Area Customs Union Common Market Economic Union Political Union.
3.4 Economic Integration Pages Learning Objectives 1.Distinguish between bilateral and multilateral (WTO) trade agreements. 2.Explain that preferential.
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Regional Economic Integration Copyright © 2011 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
International Business Part II BCS-BE-8: The student analyzes hoe international business impacts business.
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