lesson-3-Regional-Economic-Intergration

RegionalEconomicIntegrationBusinessKnowledge:(1)Majorobjectivesofregionalintegration*(2)FourlevelsofregionaleconomicintegrationFreetradeareaCustomsunionCommonmarketEconomicunion(3)EuropeanUnion(EU)(4)Asia-PacificEconomicCooperation(APEC)(5)OrganizationofPetroleumExportingCountries(OPEC)Thepastdecadeswitnessedgrowingimportanceofregionaleconomicintegration.Tobetterenjoythebenefitoftreeflowofgoods,services,capital,labourandotherresources,countrieshavesignedvariousagreementstoliberalizetradeamongthemselveswhilepossiblyputtingupbarriers(putupbarriersagainst对…设置障碍)toeconomicactivitieswithnon-members.Regionaleconomicintegrationfallsunder(fallinto分成)fourtypesgivenbelowintheorderfromleasttomostintegrative:Thefirstandloosestformisthefreetradearea.Membersofafreetradearearemovesbarrierstotheflowofgoodsandservicesamongthemselveswhileeachmemberstilladoptsitsownpolicyasregardstotradewithoutsiders(non-members).Inotherwordsdifferentmembersmayhavedifferenttariffrates(关税税率)orquotarestrictions.Consequently,non-membercountriesmaytakeadvantageofthissituationandtrytoenterthemarketoftheareafromthemembercountrywiththelowestbarrierbeforesellingthegoodstoamemberwithahigherbarrier.ThemostnotablefreetradeareaistheNorthAmericanFreeTradeAgreement(NAFTA北美自由贸易协定),thelargestfreemarketformedbytheUnitedStates,CanadaandMexicoin1991withover360millionconsumersandatotalGDPofmorethan6trillionUSdollars.ThesecondformistheCustomsUnionthatgoesastepfurtherbyadoptingthesametradepolicyforallthememberstowardcountriesoutsidetheirorganizationinadditiontoabolishing(removing)tradebarriersamongthemselves.Sinceimportsfromothercountriesaresubjecttothesametariffnomatterwhichmembertheyexportto,itisimpossiblefornon-memberstogetintothemarketofthecustomsunioninadetourastheypossiblydointhecaseoftradewithafreetradearea.SuchanexampleisMercosurformedbyArgentina,Brazil,ParaguayandUruguayin1991.Thecommonmarketisfurtherupthescaleofregionaleconomicintegration.Besidesfreemovementofgoodsandservicesandadoptionofcommonexternaltradepolicy,factorsofproductionsuchaslabour,capitalandtechnologyarefreetomoveamongmemberssothattheycanbeutilizedinamoreefficientandproductiveway.Theoverallbenefitenjoyedbyallthemembersasawholeisquiteobvious,butitishardtosayindividualmemberswillalwaysbenefit,stilllesstoexpectthemtoenjoytheadvantageoffactormobility(movement;flow)tothesamedegree.Inthepast,theEuropeanCommunityremainedacommonmarketforsomeyears.Thehighestformofeconomicintegrationiscalledtheeconomicunionwhichischaracterizedbyintegrationofthedomesticpoliciesofitsmembersinrespectofeconomy,financeetc.inadditiontoabsenceoftradebarriers,practiceofcommonexternalpolicyandfreeproductionfactormobility.ThemembersofanEconomicUnionarerequirednotonlytoharmonizetheirtaxation,governmentexpenditure,industrypolicies,etc,butalsousethesamecurrency.WiththeadoptionofthesingleEuropeancurrencyeurobymostmembersoftheEU,wecansayitiswellonitswaytowardstherealizationofaneconomicunion.Itcanbeseenthatthemembercountriesofaneconomicunionarerequiredtosurrendersomeoftheirnationalsovereignty,whichiserodingthetraditionoftheworldpoliticalsystembasedontheautonomyandsupremepowerofsovereignstates.Sopeoplebegintotalkaboutastillhigherformofintegration——thepoliticalunion,membersofwhichwillnotonlybeintegratedeconomically,butalsoharmonizetheirforeignpolicyandnationaldefence.Withthatrealized,thememberswouldmoreorlesscometogetherandformanewpoliticalentity.TheEuropeanUnionissofarthemostprominent(outstanding)exampleofregionaleconomicintegrationintheworld.Itshistorydatesbacktotheearlypost-waryears.Thefirstcommunity,theEuropeanCoalandSteelCommunity(ECSC)wasestablishedin1952,whichsetthestageformoreambitiousintegrationefforts.ThesigningofthemonumentalTreatyofRomein1957markstheestablishmentoftheEuropeanEconomicCommunitywiththeaimofgraduallyrealizingthefreemovementofgoods,services,laborandcapitalaswellastheintegrationofeconomicpoliciesofthemembercountries.Tenyearslaterin1967,theEuropeanCommunitywasformedbymergingEEC,ECSCandtheEuropeanAtomicEnergyCommunity(EURATOM).1992wasalandmarkyearinthedevelopmentoftheECwhenitbecameatruecommonmarketasenvisagedbytheSingleEuropeanAct.ThenonJanuary1,1994theEuropeanUnion(EU)cameintobeingonthestrengthoftheMaastrichtTreaty.BythenEUhad12membersincludingthesixsignatoriesoftheTreatyofRome.France,Germany,Italy,theBeneluxcountriesandsixothercountriesthatjoinedlater.(Britain,IrelandandDenmarkin1973,Greecein1981,SpainandPortugalin1986).Themembershipincreasedto15withtheparticipationofAustria,FinlandandSwedenin1995.Fromthebeginningof1999mostofthemembersbegantousethecommonEuropeancurrencyforaccountingandsettlementandin2002,eurobanknotesandcoinswereputintocirculation.TheEuropeanUnionisafull-fledgedentity.ItsexecutivebodyistheEuropeanCommissioncomposedof20commissionersoverseeing(supervise)23departmentsinchargeofdifferentaffairs.Thoughappointedbymembergovernments,thecommissionersareresponsibletotheUnioninsteadoftheirhomecountry.Themostpowerfulinstitution(body)oftheEUistheCouncilofMinisters.Ithasthefinalsayonallim