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Chapter3TheGlobalTradeEnvironment:RegionalMarketCharacteristicsandPreferentialTradeAgreementsPowerPointbyKristopherBlanchardNorthCentralUniversity©20

05PrenticeHall2023/7/183-1GATTGeneralAgreementonTariffsandTrade–treatyamongnationstopromotetradeamongmembers•Handl

edtradedisputes•Lackedenforcementpower•ReplacedbyWorldTradeOrganizationin1995©2005PrenticeHall2TheWorldTradeOrganizationP

rovidesforumfortrade-relatednegotiationsamong141members–basedinGeneva–servesasdisputemediators–empoweredwithabilitytoenforce

rulingsCountriesfoundinviolationofWTOrulesareexpectedtochangepoliciesorelsefacesanctions©2005PrenticeHall3RecentWTOCases©2005PrenticeHall4Pr

eferentialTradeAgreementsManycountriesseektolowerbarrierstotradewithintheirregions–FreeTradeAreas–CustomsUnions–CommonMarket–EconomicUnions©2005Pren

ticeHall5NorthAmericaCanada,UnitedStates,MexicoNAFTAestablishedfreetradearea–allthreenationspledgetopromoteeconomicgrowtht

hroughtariffreductionsandexpandedtradeandinvestment–nocommonexternaltariffs–restrictionsonlaborandothermovementsremain©2

005PrenticeHall6NAFTAIncomeandPopulation©2005PrenticeHall7LatinAmericaCaribbean,Central,andSouthAmerica4preferentialtradeagreementsinp

lace–CentralAmericanIntegrationSystem–AndeanCommunity–CommonMarketoftheSouth–CaribbeanCommunityandCommonMa

rket©2005PrenticeHall8AndeanCommunityBolivia,Colombia,Ecuador,Peru,VenezuelaCustomsunion–Agreementabolishedforeignexchange,financialandfiscal

incentives,andexportsubsidies–Commonexternaltariffswereestablished©2005PrenticeHall9CommonMarketoftheSouth(Mercosur)Argentina,Bra

zil,Paraguay,UruguayCustomsunion,seekstobecomecommonmarket–internaltariffseliminated–commonexternaltariffsupto20%established–intime,fact

orsofproductionwillmovefreelythroughmembercountriesChileandBolivia-–associatemembers–participationinfreetradeareabutnotcustomsunion©2005Pren

ticeHall10CaribbeanCommunityandCommonMarket(CARICOM)Antigua,Barbuda,Bahamas,Barbados,Belize,Dominica

,Grenada,Guyana,Haiti,Jamaica,Montserrat,St.Kitts,St.Lucia,St.Vincent,theGrenadines,Trinidad,TobagoReplaced

CaribbeanFreeTradeAssociationAgreedtoestablisheconomicunionwithcommoncurrencyin1998©2005PrenticeHall11Asia-PacificInc

ludes23countriesand56%ofworldpopulation–Japan–Newlyindustrializingeconomies–AssociationofSoutheastAsianNations©2005PrenticeHall12JapanGenerates14%of

world’sGNPKeyfactors–populationdensity–geographicisolationRecenteconomicstrugglesdespitestatusashighincomecountryStrongculturerequiresflexi

bilityandcommitmentfromglobalmarketers©2005PrenticeHall13NewlyIndustrializingEconomies(NIEs)Strongeconomicgrowthinrece

ntdecades–foreigninvestment–export-drivenindustrialdevelopmentSometimescalledthe4TigersofAsia–SouthKorea–Taiwan–Singa

pore–HongKong©2005PrenticeHall14AssociationofSoutheastAsianNations(ASEAN)Brunei,Indonesia,Malaysia,Philippines,Singapore,Thailand,Vietnam

,Cambodia,Laos,BurmaGoaltoimplementafreetradeareaby2003–Tariffsof20+%willbereducedto0-5%SingaporerepresentsgreatsuccessamongASEANnati

ons©2005PrenticeHall15EuropeEuropeanUnionEuropeanFreeTradeAreaEuropeanEconomicAreaTheLomeConventionCentralEuropeanFreeTradeAsso

ciation(CEFTA)©2005PrenticeHall16EuropeanUnionInitiallybeganwiththe1958TreatyofRomeObjectivetoharmonizenationallawsandregulationssothatgoods,se

rvices,peopleandmoneycouldflowfreelyacrossnationalboundaries1991MaastrichtTreatysetstagefortransitiontoaneconomicunion

withacentralbankandsinglecurrency(theEuro)©2005PrenticeHall17EuropeanFreeTradeAreaandtheEuropeanEconomicAreaAustria,F

inland,Sweden,Norway,Iceland,Liechtenstein,SwitzerlandFreetradeareaMembers(excludingSwitzerland)chosetoes

tablishEuropeanEconomicArea(EEA)–Non-EUmembersoftheEEAareexpectedtoadoptEUguidelinesNorway,Iceland,Liechten

stein,andSwitzerlandmaintainfreetradeagreementswithothercountriesaswell©2005PrenticeHall18TheLomeConventionAnaccordbetweenEUand71countriesinAfrica,Ca

ribbean,andthePacificPromotestradeandprovidespoorcountrieswithfinancialassistancefromaEuropeanDevelopmentFundCurrentlyworkingtoestablishasuccessorag

reement©2005PrenticeHall19CentralEuropeanFreeTradeAssociation(CEFTA)Hungary,Poland,CzechoslovakiaAllowsforcooperationinmanyareasincl

uding:–infrastructureandtelecommunications–sub-regionalprojects–inter-enterprisecooperation–tourismandre

tailtrade©2005PrenticeHall20TheMiddleEastAfghanistan,Cyprus,Bahrain,Egypt,Iran,Iraq,Israel,Jordan,Kuwait,Le

banon,Oman,Qatar,SaudiArabia,Syria,theUnitedArabEmirates,Yemen–PrimarilyArab,somePersianandJews–95%Muslim3keyregionalorganizations–

GulfCooperationCouncil–ArabMaghrebUnion–ArabCooperationCouncil©2005PrenticeHall21Africa53nationsoverthreedistinctareas–R

epublicofSouthAfrica–NorthAfrica–BlackAfricaRegionalagreements–EconomicCommunityofWestAfricanStates–EastAfr

icanCooperation–SouthAfricanDevelopmentCommunity©2005PrenticeHall22EconomicCommunityofWestAfricanStates(ECOWAS)Benin,BurkinaFaso,CapeVerde,T

heGambia,Ghana,Guinea,Guinea-Bissau,IvoryCoast,Liberia,Mali,Mauritania,Niger,Nigeria,Senegal,SierraLeone,TogoFreetrad

eareawithunifiedmonetaryzone©2005PrenticeHall23EastAfricanCooperationKenya,Uganda,TanzaniaFreetradeareawithposs

ibilityofexpansiontoacustomsunion©2005PrenticeHall24SouthAfricanDevelopmentCommunity(SADC)Angola,Botswana,Congo,Lesotho,Malawi,Mauriti

us,Mozambique,Namibia,SouthAfrica,Seychelles,Swaziland,Tanzania,Zambia,ZimbabweMechanismtopromotetrade,cooperation,and

economicintegrationbyblack-ruledstatesUltimatelyseekstoformcustomsunion©2005PrenticeHall25LookingAheadto

Chapter4SocialandCulturalEnvironments©2005PrenticeHall26FreeTradeAreasTwoormorecountriesagreetoabolishallinternalbarrier

stotradeamongstthemselvesCountriescontinueindependenttradepolicieswithcountriesoutsideagreement©2005PrenticeHall27F

reeTradeAreasReturn©2005PrenticeHall28CustomsUnionsEvolutionofFreeTradeAreaIncludestheeliminationofinternalbarrierstotrade(asinFTA)ANDEsta

blishescommonexternalbarrierstotradeReturn©2005PrenticeHall29CommonMarketIncludestheeliminationofinternalbarriers

totrade(asinfreetradearea)ANDEstablishescommonexternalbarrierstotrade(asincustomsunion)ANDAllowsforthefreemovementoffactorsofproduction,suc

haslabor,capital,andinformationReturn©2005PrenticeHall30EconomicUnionsIncludestheeliminationofinternalbarrie

rstotrade(asinfreetradearea)ANDEstablishescommonexternalbarrierstotrade(asincustomsunion)ANDAllowsforthefreemoveme

ntoffactorsofproduction,suchaslabor,capital,andinformation(asincommonmarket)ANDCoordinatesandharmoniz

eseconomicandsocialpolicywithintheunion©2005PrenticeHall31EconomicUnionsFullevolutionofeconomicunion–creationofunifiedcentralbank–useofsinglecurr

ency–commonpoliciesonissuesrangingfromagriculturetotaxation–requiresextensivepoliticalunityReturn©2005

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