Research Paper Final.docx

Research Paper Final.docx - EFTA MERCOSUR 1 Research Paper...

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EFTA & MERCOSUR 1 Research Paper Final Gladys De La Rosa Liberty University BUSI 464-B01 Dr. Beverlin Hammett
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EFTA & MERCOSUR 2 Introduction Regional trade agreements, also known as ACRs, are increasingly important in world trade. In essence, a regional trade agreement involves one or more countries that decide to liberalize the exchange of goods and services across its borders. RTAs are an important exception to the multilateral trade policy of the World Trade Organization (WTO), which does not allow any country to be discriminated against by a trade regime of another country. The RTAs also allow neighboring countries to participate in preferential trade agreements. The importance of trade agreements is based on the impulse they offer to a country's industry, since they promote preferential access to new markets, under a clear and long- term regulation that expands the universe of potential buyers and increases the factors of competitiveness of exporters. Competing openly in the markets requires the entrepreneur to increase their productivity, reduce production costs and manufacture differentiated and innovative products. I will explain about EFTA and MERCOSUR in RTAs, all functions as membership, advantages and disadvantages of joining a regional trade agreement: policies, achievements .. The European Free Trade Association, EFTA (European Free Trade Association or EFTA), was founded in 1960 is an intergovernmental organization established for the promotion of free trade and economic integration for the benefit of its member states. The Treaty of Asunción of March 26, 1991, this treaty gave rise to the economic integration scheme called "Common Market of the South." Initially, it set a commercial release program with progressive, linear and automatic reductions in order to perfect the
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EFTA & MERCOSUR 3 free trade area on December 31, 1994, calling this first stage a "transition period". The Treaty also contains different program clauses referring to the constitution of a customs union and the harmonization of macroeconomic policies. EFTA It was founded by the Stockholm Convention, by seven countries: Austria, Denmark, Norway, Portugal, Sweden, Switzerland and the United Kingdom, which were later joined by Finland (1961), Iceland (1970) and Liechtenstein (1991). The United Kingdom, Denmark, Portugal, Austria, Finland and Sweden later abandoned it, as they were entering as Member States in the European Union. (Drzymala, A. 2013) Currently EFTA is made up of four States: Iceland, Liechtenstein, Norway and Switzerland. The legal basis of the EFTA is found in the EFTA Convention, which governs free trade relations between the member states of the same. The countries that make up EFTA are small but high purchasing power markets: they have the highest GDP per capita in the world (US $ 78,000). They are very open economies and are integrated into global value chains. However, they have a very strong protection in agricultural markets (their average tariff of 32.8% is double that of Canada and almost three times that of the EU and the US).
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