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Chapter 10
Multinational MarketRegions and Market
Groups
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Successful Economic Union Requirements
Economic Compatibility
Political Compatibility
Geographic Proximity
Cultural Compatibility
Weakness in some must be balanced by strengths in others
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Patterns of Multinational Cooperation
Regional Cooperation Groups
Free Trade Area
Customs Union
Common Market
Political Union
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Belgium Italy Iceland NorwayDenmark Luxembourg Liechtenstein SwitzerlandFrance The NetherlandsGermany PortugalGreece SpainIreland United Kingdom
EC Countries and EU Countries andAustria Norway IcelandFinland Sweden
In Membership Negotiations Second Tier-Awaiting EvaluationCypress Hungary Bulgaria RomaniaCzech Republic Poland Latvia SlovakiaEstonia Slovenia Lithuania
European Trade Areas - 1997*European Community (EC) European Free Trade Area (EFTA)
European Unity (EU) European Economic Area (EEA)
* Visit http://europa.eu.int/ (select Abc and then Agenda 2000 for details onrequirements of accession).
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The European Economic Area: EU, EFTA, and Associates
ICELAND
NORWAY
SW
ED
EN
FINLAND
DENMARK
IRELAND
UNITED
KINGDOM
BELGIUM
Netherlands
GERMANY
FRANCE
SPAINPortugal
Switz.
ITALY
Austria
TURKEY
GREECE
ATLANTIC OCEAN
MALTA
EUEFTAEC Associated
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EC Institutions
European CommissionEuropean Commission
Council of MinistriesCouncil of Ministries
European ParliamentEuropean Parliament
European Court of JusticeEuropean Court of Justice
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A Comparison of the EU and NAFTA
* Includes 15 Countries.
**Includes intra-member trade.
EU* 373.5 $ 8,180 1,899,466 1,927,914
NAFTA 387.4 8,061 1,014,211 852,536
Population GNP Imports** Exports**($ millions)* (per capita)* ($ millions) ($ millions)
SOURCES: “Indicators of Market Size for 115 Countries,” Crossborder Monitor, August27, 1997; and International Marketing Data and Statistics, 1997 (London: Euromonitor,1997).
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Treaty of Amsterdam - Objectives
To place employment and citizens’ rights at the heart of the Union.
To sweep away the last remaining obstacles to freedom of movement and to strengthen security.
To give Europe a stronger voice in world affairs.
To make the Union’s institutional structure more efficient with a view to enlarging the Union.
SOURCES: details con be found in “The Four Major Objectives of the New Treaty for Europe.” athttp://europa.eu.int
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Level of Involvement with the EC
1. Firms based in Europe with well-established manufacturing and distribution operations in several European countries.
2. Firms with operations in a single EC country.
3. Firms that export manufactured goods to the EC from an offshore location.
4. Firms that have not actively exported to EC countries.
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Commonwealth of Independent States
RUSSIAN REPUBLIC
ARCTIC OCEAN
Twelve republics, each with their own legislaturesTwenty smaller “autonomous republic” or homelands for various ethnic groups
KAZAKHSTAN
BELARUS
UKRAINE
MOLDOVA
GEORGIA
ARMENIA
AZERBAIJAN
TURKMENISTANUZBEKISTAN
TAJIKISTANKYRGYZSTAN
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Central European Free-Trade Area (CEFTA)
Poland Hungary
Slovakia Czech Republic
Slovenia Romania
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North American Free-Trade Area (NAFTA)
Canada Canada
United States United States
Mexico Mexico
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North American Free-Trade AreaProvisions
Market Access Non Tariff Barriers
Rules of Origin Customs Administration
Investment Services
Intellectual Property Standards
Government Procurement
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Southern Cone Free Trade Area (Mercosur)
Argentina Bolivia
Brazil Chile
Paraguay Uruguay
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Latin American Integration Association (LAIA)
Argentina Mexico
Bolivia Paraguay
Brazil Peru
Chile Uruguay
Columbia Venezuela
Ecuador
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Andean Common Market (ANCOM)
BoliviaBolivia
ColumbiaColumbia
EcuadorEcuador
PeruPeru
VenezuelaVenezuela
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Caribbean Community and Common Market (CARICOM)
Antigua Montserrat Barbuda St. Kitts-Nevis Belize Anguilla Dominica St. Lucia Grenada St. Vincent Guyana Trinidad-Tobago Jamaica
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Association of Southeast Asian Nations (ASEAN)
Brunei Philippines
Indonesia Singapore
Laos Thailand
Malaysia Vietnam
Myanmar
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Comparison of Exports Among Members of APEC and the EC
APEC 2,235 732,869 770,097 22,952
America’s* 406 306,486 311,085 7,989
Asia 1812 399,455 419,901 6,447
Oceania 22 26,928 34,111 343
EC 374 515,915 628,606 8,180
Population, 1989 Exports, 1990 Exports, 1995 GNP, 1996(millions) (U.S. $ millions) (U.S. $ millions) (U.S. $ billions)
* includes: U.S., Canada, Mexico, and Chile.
SOURCES: IMF: International Financial Statistics, Direction of Trade; OECD:National Account, EC Committee: “Indicators of Market Size for 115 Countries,”Crossborder Monitor, August 27, 1997; and International Marketing Data and Statistics.1997 (London: Euromonitor, 1997).
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Economic Community of West African States (ECOWAS)
Benin Liberia Burkina Faso Mali Cape Verde Mauritania Gambia Niger Ghana Nigeria Guinea Senegal Guinea-Bissau Sierra-Leone Ivory Coast Togo
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Southern African Development Community (SADC)
Botswana South Africa Lesotho Swaziland Namibia Tanzania Malawi Zambia Mauritius Zimbabwe Mozambique
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Arab Common Market
IraqIraq
KuwaitKuwait
JordanJordan
SyriaSyria
EgyptEgypt
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Economic Cooperation Organization (ECO)
PakistanPakistan
IranIran
TurkeyTurkey
AzerbaijanAzerbaijan
TurkmenistanTurkmenistan
UzbekistanUzbekistan
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Future Multinational Trade Groups
United States/Japan
Hong Kong/Taiwan/China
Asia-Pacific Rim Countries
Hong Kong/Taiwan/Coastal Provinces of Southern China
Western Hemisphere Free Trade Area
Transatlantic Free Trade Area (United States and European Union)
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