1. Regions and Market Groups
Multinational Market
Regions and Market Groups
Chapter 10

2. Successful Economic Union Requirements
 Economic Compatibility
 Political Compatibility
 Geographic Proximity
 Cultural Compatibility
Weakness in some must be balanced by strengths in others
10-2
Irwin/McGraw-Hill

3. Patterns of Multinational Cooperation
 Regional Cooperation Groups
 Free Trade Area
 Customs Union
 Common Market
 Political Union
10-3
Irwin/McGraw-Hill

4. European Trade Areas - 1997*
European Community (EC) European Free Trade Area (EFTA)
Belgium Italy Iceland Norway
Denmark Luxembourg Liechtenstein Switzerland
France The Netherlands
Germany Portugal
Greece Spain
Ireland United Kingdom
EC Countries and EU Countries and
Austria Norway Iceland
Finland Sweden
In Membership Negotiations Second Tier-Awaiting Evaluation
Cypress Hungary Bulgaria Romania
Czech Republic Poland Latvia Slovakia
Estonia Slovenia Lithuania Malta
10-4
European Unity (EU) European Economic Area (EEA)
* Visit (select Abc and then Agenda 2000 for details on
requirements of accession).
Irwin/McGraw-Hill

5. The European Economic Area: EU, EFTA, and Associates
ICELAND EU
EFTA
NORWAY
SWEDEN
EC Associated
FINLAND
10-5
ATLANTIC OCEAN
Netherlands
DENMARK
UNITED
KINGDOM
IRELAND
GERMANY
BELGIUM
Austria
FRANCE
Switz.
ITALY
Portugal
SPAIN
TURKEY
MALTA
GREECE
Irwin/McGraw-Hill

6. EC Institutions European Commission Council of Ministries
10-6
Council of Ministries
European Parliament
European Court of Justice
Irwin/McGraw-Hill

7. A Comparison of the EU and NAFTA
Population GNP Imports** Exports**
($ millions)* (per capita)* ($ millions) ($ millions)
10-7
EU* $ 8, ,899, ,927,914
NAFTA , ,014, ,536
* Includes 15 Countries.
**Includes intra-member trade.
SOURCES: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August
27, 1997; and International Marketing Data and Statistics, 1997 (London: Euromonitor,
1997).
Irwin/McGraw-Hill

8. Treaty of Amsterdam - Objectives
 To place employment and citizens’ rights at the heart of the Union.
 To sweep away the last remaining obstacles to freedom of movement and to strengthen security.
 To give Europe a stronger voice in world affairs.
 To make the Union’s institutional structure more efficient with a view to enlarging the Union.
10-8
Irwin/McGraw-Hill
For the most current information, visit

9. Level of Involvement with the EC
1. Firms based in Europe with well-established manufacturing and distribution operations in several European countries.
2. Firms with operations in a single EC country.
3. Firms that export manufactured goods to the EC from an offshore location.
4. Firms that have not actively exported to EC countries.
10-9
Irwin/McGraw-Hill

10. Commonwealth of Independent States
ARCTIC OCEAN
BELARUS
MOLDOVA
10-10
UKRAINE
RUSSIAN REPUBLIC
GEORGIA
ARMENIA
AZERBAIJAN
KAZAKHSTAN
UZBEKISTAN
Twelve republics, each with their own legislatures
Twenty smaller “autonomous republic” or homelands for various ethnic groups
TURKMENISTAN
KYRGYZSTAN
TAJIKISTAN
Irwin/McGraw-Hill

11. Central European Free-Trade Area (CEFTA)
 Poland  Hungary
 Slovakia  Czech Republic
 Slovenia  Romania
10-11
Irwin/McGraw-Hill

12. North American Free-Trade Area (NAFTA)
Canada
10-12
United States
Mexico
Irwin/McGraw-Hill

13. North American Free-Trade Area Provisions
 Market Access  Non Tariff Barriers
 Rules of Origin  Customs Administration
 Investment  Services
 Intellectual Property  Standards
 Government Procurement
10-13
Irwin/McGraw-Hill

14. NAFTA Rules of Origin Rule Type Description
Tariff shift rule Non-NAFTA imports undergo sufficient manufacture or processing to become products that can qualify under a different tariff classification.
Value-content rule A set percentage of the value of the good must be North American (usually coupled with a tariff classification shift requirement) Some goods are subject to the value-content rule only when they fail to pass the tariff classification test because of non-NAFTA inputs.
10-14
* A complete description of the rules of origin can be found at (select NAFTA Rules of Origin and Customs Information).
Irwin/McGraw-Hill

15. Southern Cone Free Trade Area (Mercosur)
 Argentina  Bolivia
 Brazil  Chile
 Paraguay  Uruguay
10-15
Irwin/McGraw-Hill

16. Latin American Integration Association (LAIA)
 Argentina  Mexico
 Bolivia  Paraguay
 Brazil  Peru
 Chile  Uruguay
 Columbia  Venezuela
 Ecuador
10-16
Irwin/McGraw-Hill

17. Andean Common Market (ANCOM)
Bolivia
Columbia
10-17
Ecuador
Peru
Venezuela
Panama (Assoc.)
Irwin/McGraw-Hill

18. Caribbean Community and Common Market (CARICOM)
 Antigua  Montserrat
 Barbuda  St. Kitts-Nevis
 Belize  Anguilla
 Dominica  St. Lucia
 Grenada  St. Vincent
 Guyana  Trinidad-Tobago
 Jamaica
10-18
Irwin/McGraw-Hill

19. Central America Common Market (CACM)
Guatemala
10-19
Costa Rica
Nicaragua
Honduras
Irwin/McGraw-Hill

20. The Future
• NAFTA
• SAFTA ???
• FTAA ???
10-20
Irwin/McGraw-Hill

21. Association of Southeast Asian Nations (ASEAN)
 Brunei  Philippines
 Indonesia  Singapore
 Laos  Thailand
 Malaysia  Vietnam
 Myanmar
10-21
Irwin/McGraw-Hill

22. ASEAN + 3 • Brunei • Singapore • Laos • Vietnam • Malaysia  China
• Indonesia • Thailand
• Laos • Vietnam
• Malaysia  China
• Myanmar  Japan
• Philippines  South Korea
10-22
Irwin/McGraw-Hill

23. Comparison of Exports Among Members of APEC and the EC
Population, 1989 Exports, 1990 Exports, 1995 GNP, 1996
(millions) (U.S. $ millions) (U.S. $ millions) (U.S. $ billions)
APEC 2, , ,097 22,952 Americas* , ,085 7,989 Asia , ,901 6,447 Oceania 22 26,928 34,
EC , ,606 8,180
10-23
*includes: U.S., Canada, Mexico, and Chile.
SOURCES: IMF: International Financial Statistics, Direction of Trade; OECD:
National Account, EC Committee: “Indicators of Market Size for 115 Countries,”
Crossborder Monitor, August 27, 1997; and International Marketing Data and Statistics.
1997 (London: Euromonitor, 1997).
Irwin/McGraw-Hill

24. Economic Community of West African States (ECOWAS)
 Benin  Liberia
 Burkina Faso  Mali
 Cote d’ Ivoire  Mauritania
 Gambia  Niger
 Ghana  Nigeria
 Guinea
 Guinea-Bissau
10-24
Irwin/McGraw-Hill

25. Southern African Development Community (SADC)
 Angola  South Africa
 Botswana  Swaziland
 Lesotho  Tanzania
 Namibia  Zambia
 Malawi  Zimbabwe
 Mauritius
 Mozambique
10-25
Irwin/McGraw-Hill

26. Afro-Malagasy Economic Union
▶ Benin ▶ Gabon
▶ Burkina Faso ▶ Mali
▶ Cameroon ▶ Mauritania
▶ Central African Republic ▶ Niger
▶ Chad ▶ Senegal
▶ People’s Repub. of the Congo ▶ Togo
▶ Cote d’Ivoire
10-26
Irwin/McGraw-Hill

27. East African Customs Union
▶ Ethiopia ▶ Tanzania
▶ Kenya ▶ Uganda
▶ Sudan ▶ Zambia
10-27
Irwin/McGraw-Hill

28. Maghreb Economic Community
▶ Algeria ▶ Tunisia
▶ Libya ▶ Morocco
10-28
Irwin/McGraw-Hill

29. Economic Community of West African States (ECOWAS)
▶ Benin ▶ Guinea-Bissau
▶ Burkina Faso ▶ Liberia
▶ Cote d’Ivoire ▶ Mali
▶ Gambia ▶ Mauritania
▶ Ghana ▶ Niger
▶ Guinea ▶ Nigeria
10-29
Irwin/McGraw-Hill

30. West Africa Economic Community
▶ Senegal ▶ Mali
▶ Togo ▶ Mauritania
▶ Burkina Faso ▶ Niger
▶ Cote d’Ivoire
● Customs and Economic Union of Central Africa (CEUCA)
▶ Cameroon ▶ P. Rep. Of Congo
▶ C. Africa Repub. ▶ Gabon
10-30
Irwin/McGraw-Hill

31. Customs and Economic Union of Central Africa (CEUCA)
▶ Cameroon ▶ P. Rep. Of Congo
▶ C. Africa Repub. ▶ Gabon
10-31
Irwin/McGraw-Hill

32. Arab Common Market Iraq Kuwait Jordan Syria Egypt 10-32
Irwin/McGraw-Hill

33. Economic Cooperation Organization (ECO)
Pakistan
Iran
10-33
Turkey
Azerbaijan
Turkmenistan
Uzbekistan
Irwin/McGraw-Hill

34. Future Multinational Trade Groups
 United States/Japan
 Hong Kong/Taiwan/China
 Asia-Pacific Rim Countries
 Hong Kong/Taiwan/Coastal Provinces of Southern China
 Western Hemisphere Free Trade Area
 Transatlantic Free Trade Area (United States and European Union)
10-34
Irwin/McGraw-Hill