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Ch08_Fall+10_LN - Cross-National Cooperation & Agreements...

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Chapter 8Cross-National Cooperation & Agreements
Where are wenow?Agreements1. Globalization and IB2. Cultural Environment3. Political & LegalEnvironment4. Economic    Environment5. Globalization &Society9. & 10. World Financial               Environment6. International Trade& Factor Mobility7. Government Influenceon Trade8. Cross-nationalCooperation &Agreements
How did we get here?Ch. 1 – Globalization and IBBroadening of interdependent relationships and a “ShrinkingGlobe”Ch. 4 – Economic EnvironmentVarying economic differences and opportunities for FDICh. 6 – International Trade TheoriesUnderstanding of comparative advantages and capabilitiesSearch for global efficiency through free trade
How did we get here?(cont.)Ch. 7 – Government Influence on TradeCoverage of negative impacts of government influenceCh. 8 – Cross-national Cooperation and AgreementsFreer trade is the best way to capture the benefits ofglobalizationGATTand theWTOhave been too slow to create Globaleconomic integrationBilateral and regional economic integration is the next bestapproach
OverviewWhat is economic integration?Levels of Economic IntegrationEffects of Economic IntegrationBarriers and Objections to Trade BlocsCase Studies of IntegrationU.K. enters the European Union VideoUpdate onNAFTAEconomic Integration around the worldWhy Cross-national cooperation matters tofuture managersCase Application: Wal-Mart Goes South
What is Economic Integration?Economic IntegrationApproaches toEconomic IntegrationKey Principles• An agreementbetween nationswithin aneconomicblocto reduce andultimately removetariffand nontariffbarriers to the freeflow of products,capital, and laboracross the bloc• Globalintegrationvia the World TradeOrganization• Bilateralintegrationbetween twocountries• Regionalintegrationvia an economic bloc• National Treatment• Most Favored NationStatus• Transparency inapplication anddispute resolution• Under what circumstance(s) is economic integration not aboutFree Trade?
Why Bilateral and RegionalEconomic Integration?To exploit gains from free trade and investmentGATT / WTO not fast enoughAgreement & coordination is easier between a fewcountries than manyThreat of being left outHowever...Government disciplineis still requiredConstituents in countries involved are difficult to manageNot all blocks are created equalIntegration efforts are still rife with exceptions
Levels ofEconomicIntegrationFree Trade Areano trade barriers between insiders, but differentbarriers for outsidersCustoms UnionFTA+ common barriers for outsidersCommon MarketFTA+CU+ free flow oflabor, capital, andtechnologyComplete Economic Integration/Economic Unioncommon currency, taxes, monetary policy, etc.
Free Tradearea

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Term
Fall
Professor
Karake
Tags
Business, International Trade, European Union, World Trade Organization, economic integration

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