Economic Unions SOL WG.9d Economic Geography Economic Unions SOL WG.9d

Economic Unions Examples of economic unions: EU - European Union NAFTA - North American Free Trade Agreement ASEAN - Association of Southeast Asian Nations OPEC - Organization of Petroleum Exporting Countries

European Union The European Union is an economic union in Europe. Most countries in Europe are members of the EU. Switzerland, Norway, and Iceland did not join the EU. One goal of the EU is to create a common market by getting rid of tariffs, improving transportation networks, introducing one currency, and making it easier for people to travel between countries.

European Union

Euro

Euro Blue = Area where euro is used Red = Other eu members

NAFTA The North American Free Trade Agreement is a trade agreement between Canada, the United States, and Mexico. NAFTA has eliminated tariffs between these three countries, which means there is no tax on imported goods.

NAFTA Some negative impacts of NAFTA are: The price of food increased in Mexico due to cheap imported food from U.S. agribusiness. U.S. manufacturing workers lost jobs because many factories moved to Mexico. Large factories called maquiladoras operate on the Mexican side of the border and they often mistreat workers and pay low wages.

ASEAN ASEAN stands for Association of Southeast Asian Nations. ASEAN has ten members: Brunei, Vietnam, Laos, Cambodia, Malaysia, Thailand, Singapore, Philippines, Indonesia, and Myanmar (Burma). ASEAN has many goals but it has reduced or eliminated tariffs between most of the members.

ASEAN

ASEAN

OPEC OPEC stands for Organization of Petroleum Exporting Countries. The members of this organization set the price and production of oil. Most of the members of OPEC are in the Middle East, but Venezuela, Nigeria, and Indonesia are also members. Not every country that has oil is a member of OPEC. Russia and the U.S. are not members.

OPEC

Advantages of Unions More efficient industries Access to larger markets Access to natural, human, and capital resources without restrictions Greater influence on world market

Disadvantages of Unions Closing of some industries Concentration of some industries in certain countries Agribusiness replacing family farms Difficulty in agreeing on common economic policies

Agribusiness Agribusiness refers to large scale farming done by businesses. Agribusiness operations typically cultivate thousands of acres of land or raise thousands of animals at a time and they are integrated with the processing and distribution networks.