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

2. Introduction
The evolution and growth of multinational market regions—those groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriers—are the most important global trends today
Organizational form varies widely among market regions, but the universal goal of multinational cooperation is economic benefit for the participants
Political and social benefits sometimes accrue, but the dominant motive for affiliation is economic.
The world is awash in economic cooperative agreements as countries look for economic alliances to expand access to free markets.

3. Traits of Successful Economic Unions
Economic Compatibility (similar economic systems)
Political Compatibility (similar political systems)
Cultural Compatibility
Geographic factors
Weakness in some must be balanced by strengths in others

4. Patterns of Multinational Cooperation
There are five fundamental groupings for regional economic integration as follows:
Viewed on a spectrum, each requires greater levels of cooperation among member nations and include:
Regional Cooperation Groups
Free Trade Areas
Customs Unions
Common Markets and Economic Unions
Political Unions

5. Regional Cooperation Groups
A group of countries that have agreed to participate in basic industries beneficial to each or jointly develop joint ventures that benefit both countries, e.g., Colombia and Venezuela built a hydroelectric dam on the Orinico river which both share

6. Free Trade Areas
A group of countries that have agreed to reduce drastically (but not eliminate) all trade barriers such as customs duties and non-tariff barriers (standards)
Member countries can have different trade policies for other external countries
Examples of Free Trade Areas: NAFTA, and European Free Trade Area (EFTA) between Iceland, Liechtenstein, Norway, and Switzerland

7. Customs Unions
In addition to drastically reducing trade barriers from FTA identified previously, a group of countries that have agreed to eliminate customs duties levied among member countries
Also establishes common external barriers like imposing a common tariff on goods imported from countries out of the association.
Examples of Customs Unions: East African Customs Union between Ethiopia, Kenya, Sudan, Tanzania, Uganda, and Zambia

8. Common Markets
In addition to drastically reducing trade barriers, and eliminating customs duties levied from FTA and Customs Unions identified previously, a common market is a group of countries that allow:
the free flow of capital and labor (engineers, doctors, and lawyers can work without recertification) among members
a common currency
a common central bank; and
common policies on transportation, agriculture, social services, welfare, and taxes
Latin America boasts three common markets: the Central American Common Market (CACM), the Andean Common Market, and the Southern Cone Common Market (MERCOSUR).
The three have roughly similar goals and seek eventual full economic integration.

9. Political Unions
The highest level of cooperation among member countries
A group of countries that have agreed to complete political and economic integration and cooperation among members
Examples of Political Unions: COMECON (Council for Mutual Economic Assistance), and U.S.S.R., but it no longer exists

10. Global Markets and Multinational Market Groups
Many Multinational Market Groups have emerged due to recent trends that include:
The globalization of markets
The restructuring of Eastern Europe into independent market-driven economies
The dissolution of the Soviet Union into independent states and
The worldwide trend toward economic cooperation
Various examples of Multinational Market Groups are provided next

11. European Market Regions

12. European Union History

13. Symbol of the Euro

14. Newly Independent States

15. CIS or Commonwealth of Independent States

16. North American Free-Trade Area (NAFTA)
Canada
United States
Mexico

17. NAFTA Rules of Origin 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.

18. Economic Cooperation Organization (ECO)
Pakistan
Iran
Turkey
Azerbaijan
Turkmenistan
Uzbekistan

19. Central European Free-Trade Area (CEFTA)
Poland
Hungary
Slovakia
Czech Republic
Slovenia
Romania

20. Southern Cone Free Trade Area (MERCOSUR)
Argentina
Bolivia
Brazil
Chile
Paraguay
Uruguay

21. Latin American Integration Association (LAIA)
Argentina
Mexico
Bolivia
Paraguay
Brazil
Peru
Chile
Uruguay
Columbia
Venezuela
Ecuador

22. Andean Common Market (ANCOM)
Bolivia
Columbia
Ecuador
Peru
Venezuela
Panama

23. Central America Common Market (CACM)
Guatemala
Costa Rica
Nicaragua
Honduras

24. Caribbean Community and Common Market
(CARICOM)
Antigua
Jamaica
Barbuda
Montserrat
Belize
St. Kitts-Nevis
Dominica
Anguilla
Grenada
St. Lucia
Guyana
St. Vincent
Trinidad-Tobago

25. Association of Southeast Asian Nations (ASEAN)
Brunei
Singapore
Indonesia
Thailand
Laos
Vietnam
Malaysia
Myanmar
Philippines

26. Association of Southeast Asian Nations (ASEAN) + 3
Brunei
Singapore
Indonesia
Thailand
Laos
Vietnam
Malaysia
Japan
Myanmar
S. Korea
Philippines
China

27. Economic Cooperation Organization (ECO)
Pakistan
Iran
Turkey
Azerbaijan
Turkmenistan
Uzbekistan

28. Asia-Pacific Economic Cooperation (APEC)
Australia
Japan
Philippines
Brunei
South Korea
Russia
Canada
Malaysia
Singapore
Chile
Mexico
Taiwan
China
New Zealand
Thailand
Hong Kong
Papua New Guinea
U.S.A.
Indonesia
Peru
Vietnam

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

30. Southern African Development Community (SADC)
Angola
Gabon
Botswana
Mali
Lesotho
Mauritania
Namibia
Niger
Malawi
Senegal
Mauritius
Togo

31. East African Customs Union
Ethiopia
Kenya
Sudan
Tanzania
Uganda
Zambia

32. West Africa Economic Community
Senegal
Togo
Burkina Faso
Cote d’Ivoire
Mali
Mauritania
Niger

33. Customs and Economic Union of Central Africa (CEUCA)
Cameroon
Central African Republic
Gabon
People’s Republic of Congo

34. Maghreb Economic Community
Algeria
Libya
Morocco
Tunisia

35. Arab Common Market
Iraq
Kuwait
Jordan
Syria
Egypt

36. Future Multinational Trade Groups
United States/Japan
Hong Kong/Taiwan
Asia-Pacific Rim Countries
Hong Kong/Taiwan/Coastal Provinces of Southern China
Western Hemisphere (North and South America) F.T.A.
Transatlantic Free Trade Area (U.S.A. & EU)
NAFTA including Central America
SAFTA