To define regional economic integration would be to say to arrange an agreement between country’s that agree to manage trade, fiscal or momentary policies.
Regional economic integrations is also defined as “agreements among countries, in geographic region to reduce, and ultimately remove tariffs, and nontariff barriers to the free flow of goods, services, and factors of production between each other” (Hill, 2009, p. 276). The year 1992 in the month of August talks between the governments of the United States, Canada and Mexico took place.
These talks lead to the North American Free Trade Agreement (NAFTA).
This agreement eliminated all tariffs on bilateral trade between the three countries United States, Canada, and Mexico. NAFTA became law on January 1, 1994. “Under the NAFTA, all non-tariff barriers to trade between the United States, Canada and Mexico were eliminated; many tariffs were eliminated immediately, with others being phased out over periods of 5 to 15 years” (U. S.
Customs and Border Patrol, 2008).Numerous levels of regional economic integration exist.
One level is in the free trade area which has no barriers for the trade of goods among member countries. Another level is where customs union which is a free trade area that includes a common external trade policy.
A common market which is a customs union that allows production to move between members is another level. Another level is an economic union which is a common market that requires a common currency, tax rate, and monetary and fiscal policies.Finally the last level is a full political union which is an economic union that includes a central political unit to coordinate the economic, social and foreign policy of member states. (p.
277 – 278). For People both support and criticize the regional economic integration. The supporters accept as true that regional integration permits a disadvantaged country to appreciate the scale of the economies. Supporters also believe that an increase of overall economic efficiency is beneficial to these countries.
Believers of NAFTA do argue that the 3 countries the United States, Canada and Mexico will benefit from such a movement. The U. S. and Canada will profit due to increased incomes in Mexico.
This will increase the demand on products from the U. S. and Canada which will in turn make up for production job losses. Another advantage of regional integration will be in the venue of international competitiveness allowing firms to better compete with their Asian and European competitors (p 291-292).
14 years NAFTA has achieved many of its core goals including expanding trade and investment between the U.S. , Canada and Mexico; trade among NAFTA nations has more than tripled, “…from $297 billion to $930 billion and business investment has risen by 117% since 1993” (U. S.
Trade Representative,2008, para 1). U. S. employment rose from 110.
8 million people in 1993 to 137. 6 million in 2007” (para 2). Mexican wages have continued to grow since the 1994 peso crisis, while studies have shown that Mexican industries that export or that are in regions with a higher concentration of foreign investment and trade also have higher wages” (para 6).
Cite this Regional Integration Paper
Regional Integration Paper. (2017, May 09). Retrieved from https://graduateway.com/regional-integration-paper/