Identify and briefly compare the major regional trading groups in Latin America, Asia, and Africa.
Answer:
a. The major trade group in South America is MERCOSUR. In 1991, Brazil, Argentina, Paraguay, and Uruguay established MERCOSUR. MERCOSUR is significant because of its size; it generates 75 percent of South America's GNP. Another major group in South America is the Andean Group (CAN), which is composed of Bolivia, Colombia, Ecuador, and Peru. There are three major regional trading groups in Central America and the Caribbean: the Central American Common Market, the Central American Free Trade Agreement-Dominican Republic (which includes the United States), and the Caribbean Community and Common Market (CARICOM). These groups are hampered by their small markets and dependence on the United States for trade.
b. In Asia, the key group is the Association of South East Asian Nations (ASEAN), which was organized in 1967 and comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. It is promoting cooperation in many areas, including industry and trade. In 1993, the ASEAN countries formed the ASEAN Free Trade Area (AFTA) to deal with the specific intrazonal trade issues.
c. The Asia Pacific Economic Cooperation (APEC) is massive since it includes every country that borders the Pacific Ocean. In spite of the size of APEC, it does not engage in treaties like the other trade agreements, so it has potential but not much teeth.
d. Africa is divided into many different trading groups based on geographic proximity and links to former colonial powers. Most groups are hampered by poverty, small market size, and dependence on former colonial powers. The African Union is modeled loosely on the EU, but that type of integration will likely be very difficult.
Learn More :
Multinational Business
- Describe the different types of regional economic integration and give an example of each type.
- Explain the static effects and dynamic effects of economic integration. What is the difference between trade creation and trade diversion resulting from economic integration?
- What are the functions of the European Commission, the European Parliament, the Council, and the European Court of Justice?
- What are the rules of origin and regional content provisions of NAFTA?
- What has been the impact of NAFTA on trade and employment in NAFTA nations?
- Are commodity agreements effective? Why or why not?
- Why is geography important to most regional trade agreements? Provide examples of RTAs to illustrate your answer.
- In a brief essay, explain the roles of the World Trade Organization and the United Nations in international trade.
- What is the difference between a free trade agreement and a customs union? Provide examples of each in your answer.
- What are the disadvantages of import restrictions in regards to creating domestic employment opportunities?
- Explain the rationale for and problems with making the infant-industry argument work as intended.
- Why do developing countries sometimes impose import restrictions to increase their levels of industrialization?
- What is the difference between import substitution policies and export-led development policies? What are the potential effects of each?
- Many companies and industries argue that they should have the same access to foreign markets as foreign industries and companies have to their markets. In a short essay, discuss this issue of "comparable access," or "fairness."
- What are common reasons that governments enact export restrictions? What are the possible negative consequences of such restrictions?
- What is dumping? What are the possible effects of dumping on a country's economy?
- Briefly discuss the four non economic rationales for governmental intervention in the free movement of trade: maintaining essential industries, preventing shipments to unfriendly countries, maintaining or extending spheres of influence, and preserving national identity.
- Describe and compare the different types of tariffs (duties).
- In a short essay, list and discuss the nontariff barriers that relate to direct price influences: subsidies, aid and loans, customs valuations, and other direct price influences.
- List and define the types of nontariff barriers that limit the quantity of goods traded: quotas, embargoes, buy local legislation, standards and labels, specific permission requirements, administrative delays, and reciprocal requirements.
- What are the main arguments for limiting trade in services? What is your opinion on limiting trade in services?
- As an international business manager, how can you benefit from an understanding of international trade theories?
- In a short essay, discuss the theory of mercantilism, and discuss favorable and unfavorable balances of trade as they apply to international business.
- In a short essay, discuss the theory of absolute advantage and the reasons a country's efficiency improves based on this theory.