Sample Essay on Regional Integration in Promoting Global Business
On the global scale, businesses like multinationals prefer manufacturing done in places where workforce is cheaper. But for smaller businesses, such perspective is unattainable. They are largely benefiting from regional integration policies. The European Union (EU), North American Free Trade Agreement (NAFTA), Central America Free Trade Agreement (CAFTA), and Association of Southeast Asian Nations (ASEAN) are some of the blocs that ensure regional free trade.
Europe. The European Union (EU) is a supranational and intergovernmental union of 27 states in Europe. Other of 46 European states are not included. It was established in 1992 and is the successor to the six-member European Economic Community founded in 1957. the fact that such agreements protect and promote industries was demenstrated when France and Germany concluded a bilateral agreement on coal industry protection in 1950. the EU’s two major policies are directed at developing the common market (Common Agricultural Policy, Fisheries Policy), and developing the markets in poor European countries who are knocking at the door of the EU (Regional Policy). Among other regional integration blocs, the EU is the most advanced.
Asia-Pacific. The Asian economic bloc resembles the EU in its development. ASEAN had six members, namely, Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand in 1992, the time when the EU was formed. Vietnam, Laos, Myanmar, and Cambodia who came by 2000 were allowed into a free trade area, while latecomers are only working on meeting the obligations of the ASEAN Free Trade Area (AFTA). Today, ASEAN is a geo-political and economic organization of 10 countries located in Southeast Asia. It became geopolitical, when it started to improve existing ties the countries beyond the ASEAN, such as the People’s Republic of China, Japan, and South Korea. Many of its policies were patterned after the now-defunct European Community. Because the member states of ASEAN are more diverse culturally, and for other reasons, less integration was achieved in this bloc.
North America. NAFTA is a bloc that has only three member states. Nevertheless, the area of this regional bloc is one of the largest, as well as the GDP, both in total monetary and per capita value. The bloc was created under the US international law system and it does not create its own common policies regarding trade. NAFTA does not welcome other member states, the figures show that it only spurred trade with Mexico and the USA, figures of trade increase with other non-NAFTA partners being the same during the past 10 years.
Americas. CAFTA is a free trade agreement, legally a treaty under international law, but not under US law. The agreement encompasses the United States and the Central American countries of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and since 2004, the Dominican Republic. The agreement does not encompass most of the 56 countries of Americas. They are either under the CARICOM agreement, or sign bilateral free trade agreements with most countries.
Africa. The countries of Africa are are under the agreements of ECOWAS, SACU, COMESA and others, the statistics showing that the GDP of these countries is the lowest among all other worldwide blocs.
Achievements. Trade preferences are given to the countries that do not violate international law. Also, the country’s international policy is considered, as well as its infrastructure and market development. Also, the cost of its workforce is important. These factors are enough to create an economical bloc. Facts show that global businesses location is shifting from developed countries to so-called developing countries. My opinion is that these blocs help integration on the regional, but not on the global scale. Some people even find that proliferation of smaller blocs can be a hindrance to larger groups such as WTO or NAFTA that are more interested in promoting free trade throughout the world. More resources: