Regional Paper - MERCOSUR
Regional integration is the process by which countries agree to reduce or eventually remove tariff and non-tariff barriers to promote the free flow of goods and services amongst countries. Global business is accomplished when organizations conduct business internationally and are not committed or bounded to a single home country. Regional integration combined with global business supports organizations conducting business globally amongst a variety of countries by removing restricting barriers and other obstacles. A move toward regional economical integration can provide consumers with new benefits and present organizations with innovative challenges (Hill, 2005).
There are several levels of regional economic integration which includes: free trade area, customs union, common market, economic union, and political union. Currently the North American Free Trade Agreement (NAFTA) is in the free trade area, the European Union (EU) is in the economic market, and The Southern Common Market (MERCOSUR) is in the customs union. The integration groups listed above pertain to members of the same regional integration union. However, unions are allowed to decide what trade policies are put into play with nonmembers of their union.
The Southern Common Market, also known as MERCOSUR, is a regional integration development that includes Brazil, Argentina, Paraguay, and Uruguay. MERCOSUR was originated in 1988 when a free trade pact was cultivated between Brazil and Argentina. This regional integration brought about an 80 percent increase in trade amongst the two countries. The success of the pact encouraged Paraguay and Uruguay to become part of the integration. In March of 1991, the Treaty of Asuncion ...
... middle of paper ...
...eferences
Connolly, M. & Gunther, J. (1999, May). Mercosur: Implications for Growth in Member Countries. Current Issues in Economics and Finance. Retrieved on January 22, 2006, from http://www.newyorkfed.org/research/current_issues/ci5-7.pdf#search='Mercosur%3A%20implications%20for%20growth%20in%20member%20countries'.
Hill, C. (2005). International Business: Competing in the Global Marketplace Fifth Edition. Retrieved on January 15, 2006, from rEsource.
Ministry of External Relations. (2005). Retrieved on January 22, 2006, from http://www.mre.gov.br/ingles/faq/p_mercosur.asp.
Paiva, P. & Gazel, R. (2004, January). MERCOSUR Economic Issues: Successes, Failures and Unfinished Business. Center for Latin American Studies University of California, Berkeley. Retrieved on January 22, 2006, from http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1013&context=clas.
Benitez, Gerardo, Latin American Perspectives: The Maquiladora Program Its Challenges Ahead, THE WHARTON JOURNAL, December 11, 1995.
Economic integration is the joining of economic policies between different states/regions. This eliminates tariff and non-tariff barriers to the flow of goods, services and factors of production between the regions. Economic integration has varying levels referred to as trading blocs; these are a form economic integration. A trading bloc is a group of nations that have been made a bilateral or multilateral agreement. There are four types of trading blocs. The least advanced level is the Free Trade Area. The features of this level is that reduced tariff barriers between signatories, which at times are abandoned altogether and there is free movement of labour and capital and the non-member countries have an independent set of tariffs against member countries. The second level of economic integration is the Customs Union. This is a Free Trade Agreement plus a common external tariff. Member countries agree to reduce tariff barriers among themselves and they have in common, this is referred to as tax harmonisation. The Common Market is the third level of trade blocs. This has features of the Customs Union plus free movement of capital and labour and some policy harmonisation such as similar trade policies to prevent certain member countries having an unfair advantage. The European Union is an example of a Common Market and is an economic and political partnership that involves 28 European countries. It allows goods and people to be moved around and has its own currency, the euro, which is used by nineteen of the member countries (The UK excluded). It also has its own parliament and sets rules in a wide range of areas such as transport,...
Mignolo, W. D. (2005). The Idea of Latin America (pp. 1-94). Malden, MA: Blackwell Publishing.
Today I bring to your forefront of thought, the island of Hispaniola. This island is the namesake for the two countries who run the land, the Dominican Republic and Haiti. Both nations hail from a joint introduction into the world market and post-European colonization, but as time progressed, each one had a different outlook to the world stage. The present day Dominican Republic and Haiti are worlds apart on an island which keeps them together. Their culture is separated by the colonial residuals that lay imbedded into their communities. They are on different sides of the spectrum of structural growth due to the resulting outcomes from decades of political ruling and policy making. On one side we have the second independent state of the Americas,
In the 1500s Pedro Alvares Cabral landed on Brazil, previously a inhabited by tribal nations, and claimed the land in the name of Portugal. Brazil remained a Portuguese colony until September 7, 1822 when it declared its independence becoming the Empire of Brazil making the nation a constitutional monarchy with a parliamentary system. In early 1964, a Military junta took control of the nation until it fell in 1985 further changing the structure of the nation, and finally in 1988 a formal constitution was created enacting 26 states encompassing its boarders. Throughout the history of Brazil, the nation was never able to fully immerse itself in the international market and expand its economy, until today. Latin America has not had the best of luck when it comes to economic development and many nations in Latin America have similar issues when it comes to economic and societal development, and many of these issues are cause by the same things. For example, before the military coup in 1964 Brazil was in massive amounts of debt to international partners, however, during the military rule the payment of this debt was halted so the trust and economic backing of countries stopped with the payments. Many plans have been enacted after the fall of the military control to reverse the economic downfall that occurred in the country and continent in the 20th century and especially in the 1980s, the lost decade. In Brazil alone, there have been at least seven economic plans to reverse the economic hardships of the country, from the Cruzado Plan to the Real Plan, none seemed to work. However, in the past decade the Brazilian economy has seen an amazing increase and the condition of life of the people in the nation has increased with it. The quest...
The main purpose of this paper is to study and analyze the effects that the U.S. Free Trade Agreement have in Colombia’s developing economy by demonstrating the effects in Colombia’s GDP after the agreement, the effects in farmers, illegal drugs, and in the internal market share...
Hill, C., Wee, C. and Udayasankar, K. 2012.International Business:An Asian Perspective. 8th ed. Singapore: McGraw-Hill.
Svensson, G., 2001. 'Globalization' of Business Activities: A 'Global Strategy' Approach, Management Decision, 39(1), pp.6-18.
According to the Office of the United States Trade Representative, the case for CAFTA is based on the growth, opportunity and democracy of the aforementioned regions. The agreement will eliminate 80% of tariffs on U.S. goods exported to these regions. Even though these countries are small, they represent big consumer markets. Central America and the Dominican Republic heads the second largest U.S. export market in Latin America, closely trailing Mexico. The rest of the tariffs will be phased out over the next decade. This will give American businesses, workers and farmers even greater access to 44 million Central American consumers.
The case for regional integration is both simple and irrefutable. First we are small and we need to achieve economies of scale. We need to achieve such economies in markets, production, the mobilisation of regional capital for regional use, university education, science and technology, sea and air transport to mention some areas.
According to Hill, regional economic integration refers to "agreements among countries in a geographic region to reduce, and ultimately remove, tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other." The prevailing economic argument for regional economic integration is that it creates economic synergy by allowing each country to focus only on what it is most efficient at producing.
15. Hill, Charles W.L. International Business: Competing in the Global Marketplace. New York : McGraw-Hill, 2007.
Daniels, J. D., Radebaugh, L. H., and Sullivan, D. P., (2011). International Business: Environments and Operations. Prentice Hall, Upper Saddle River, New Jersey.
Regional economic integration enhances political cooperation. Several group of nation can have significantly greater political influence than each nation would have by individually. This integration is an essential strategy to address the effects or issues of conflicts and political instability that may affect the region. Improved political cooperation due to regional economic integration is also useful tool to handle the social and economic challenges associated with globalization. Countries which are link together will be more dependent on each other that will reduce the likelihood of violent conflict between each nation. This integration will also give countries greater political clout when dealing
Stonehouse, G., Campbell, D., Hamill, J. & Purdie, T. (2004). Global and Transnational Business (2nd ed.). Chichester: John Wiley & Sons.