Chapter 9: Regional Economic Integration
common market
A group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other and (2) the pursuit of a common external trade policy (Mercosur)
ASEAN
Association of Southeast Asian Nations
European Free Trade Association
Between Norway, Iceland, Liechtenstein, and Switzerland; began in 1960
Brexit
British exit from the European Union; voted to leave on June 23, 2016
CAFTA
Central American Free Trade Agreement
2
Europe has __ trade blocs
North America Free Trade Agreement
NAFTA; started in Jan 1994 between US, Mexico and Canada
Mercosur
Pact among Argentina, Brazil, Paraguay, and Uruguay to establish a free trade area
Transatlantic Trade and Investment Partnership
TTIP
USMCA
United States, Mexico, Canada Agreement; started July 1, 2020; replaced NAFTA
regional economic integration
___ ____ ___ is an attempt to achieve additional gains from the free flow of trade and investment between countries beyond those attainable under international agreements such as the WTO
Andean Community
a 1969 agreement among Bolivia, Chile, Ecuador, Colombia, and Peru to establish a customs union
Treaty of Lisbon
a European Union-sanctioned treaty that will allow the European Parliament to become the co-equal legislator for almost all European laws
International Monetary Fund
a United Nations agency to promote trade by increasing the exchange stability of the major currencies
political union
a central political apparatus coordinates economic, social, and foreign policy
European Free Trade Association (EFTA)
a free trade association including Norway, Iceland, Liechtenstein, and Switzerland.
customs union
a group of countries committed to (1) removing all barriers to the free flow of goods and services between each other and (2) the pursuit of a common external trade policy (Andean Pact)
economic union
a group of countries committed to (1) removing all barriers to the free flow of goods, services, and factors of production between each other, (2) the adoption of a common currency, (3) the harmonization of tax rates, and (4) the pursuit of a common external trade policy. (EU)
free trade area
a group of countries committed to removing all barriers to the free flow of goods and services between each other, but pursuing independent external trade policies.
Trans-Pacific Partnership (TPP)
a multilateral free trade agreement being negotiated by 12 Asia Pacific countries
Tripartite Free Trade Agreement (TFTA)
a regional trade agreement among twenty-seven African countries
Trans Pacific Partnership
a trade agreement among 12 Pacific Rim countries
Central American Common Market
a trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, which began in the early 1960s but collapsed in 1969 due to war
Maastricht Treaty
a treaty created in 1991 that set strict financial criteria for joining the proposed monetary union, with it single currency and set 1999 as the start date for its establishment.
regional economic integration
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
free trade area
all barriers to the trade of goods and services among member countries are removed, but members determine their own trade policies with regard to nonmembers
CARICOM
an association of English-speaking Caribbean states that are attempting to establish a customs union.
European Union (EU)
an economic and political alliance of twelve European nations formed in 1993 that has since grown to include twenty-seven European nations.
European Community
an organization promoting economic unity in Europe formed in 1967 by consolidation of earlier, more limited, agreements. Replaced by the European Union (EU) in 1993.
ASEAN Free Trade Area (AFTA)
between the six original members of ASEAN came into effect in 2003 ASEAN and AFTA are moving towards establishing a free trade zone
The Single European Act
committed European Commission countries to work toward establishment of a single market by 1992; objective was to remove all frontier controls between EC countries, apply the principle of mutual recognition to product standards, institute open procurement to nonnational suppliers, lift barriers to competition in retail banking and insurance, remove all restrictions on foreign exchange transactions between member nations, and abolish restrictions to cabotage
Mercosur
common market in southern South America created in order to bolster the economy of member countries
East African Community
economic organization that included Kenya, Uganda, and Tanzania and was highly integrated during the late 1960s and early 1970s
European Parliament
elected EU body that provides consultation on issues proposed by European Commission; debates legislation proposed by the commission and forwarded to it by the council
customs union
eliminates trade barriers between member countries and adopts a common external trade policy; most countries that enter desire further integration in the future
Association of Southeast Asian Nations (ASEAN)
formed in 1967, an attempt to establish a free trade area among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Vietnam, and Thailand.
North American Free Trade Agreement (NAFTA)
free trade area among Canada, Mexico, and the United States
90%
free trade areas account for nearly ___ of regional agreements
Continental Free Trade Area
free trade pact; 44 countries signed in March of 2018
trade blocs
geographic regions that trade mostly among themselves and keep out non-bloc goods
Maastricht Treaty
in 1992 this treaty committed EU members to adopt a single currency, the euro; used by 19 of the 28 member states
Treaty of Lisbon
increased the power of the European Parliament
political union
independent states combine into a single union; requires that a central political apparatus coordinate economic, social, and foreign policy for member states
European Coal and Steel Community
international organization to control and integrate all European coal and steel production. Consisted of West Germany, Italy, Belgium, Netherlands, Luxembourg, and France. Number 1 goal to be so close together economically that war against them impossible. "The six".
economic union
involves the free flow of products and factors of production between members, the adoption of a common external trade policy, and in addition, a common currency harmonization of the member countries' tax rates and a common monetary and fiscal policy; involves sacrificing a significant amount of national soveriegnty
common market
no barriers to trade between member countries, a common external trade policy, and the free movement of the factors of production; requires significant harmony among members in fiscal, monetary, and employment policies
optimal currency area
region in which similarities in economic activity make a single currency and exchange rate feasible instruments of macroeconomic policy
USMCA
replaced NAFTA
European Commission
responsible for proposing EU legislation, implementing it, and monitoring compliance
Court of Justice
supreme appeals court for EU law
Treaty of Rome
the 1957 treaty that established the European Community
4
the European Free Trade Association has __ members
28
the European union has ___ members
Rome
the Treaty of ___ established the European Economic Community in 1957; name was changed to EU in 1993
United States
the ___ ___ is an example of a political union
European Union
the ___ ___ is an example of an economic union
Central America Free Trade Agreement (CAFTA)
the agreement of the member states of the Central America Common Market joined by the Dominican Republic to trade freely with the United States
European Central Bank (ECB)
the central authority, located in Frankfurt, Germany, which oversees monetary policy in the common currency area
European Coal and Steel Community
the forerunner of the European Union was the ___ ___ __ ___ ___ (formed in 1951)
euro zone
the second largest currency zone in the world after the US dollar
Caribbean Single Market and Economy (CSME)
the six CARICOM members that agreed to lower trade barriers and harmonize macroeconomic and monetary policies
court of justice
the supreme appeals court of the EU
European Council
the ultimate controlling authority in the EU; the heads of state of EU members and the president of the European Commission
USMCA (United States-Mexico-Canada Agreement
this is a regional trade agreement between the US, Canada, and Mexico that is designed to replace NAFTA. The agreement has been signed by the leaders of all three countries, but at the time of publication has not yet been ratified by the legislators of those countries
trade creation
trade created due to regional economic integration; occurs when high-cost domestic producers are replaced by low-cost foreign producers in a free trade area.
trade diversion
trade diverted due to regional economic integration; occurs when low-cost foreign suppliers outside a free trade area are replaced by higher-cost suppliers within a free trade area.
Transatlantic Trade and Investment Partnership (TIPP)
trade with the EU
Maastricht Treaty
treaty agreed to in 1992, but not ratified until January 1, 1994, that committed the 12 member states of the European Community to a closer economic and political union.
European Stability Mechanism
when various euro zone governments, urged on by France and Germany, tired to create a new organization that would collect funds from member nations and then provide loans for indebted governments or for government funded bailout of major banks under extreme economic stress.
