Question

3. Consider the major geographic areas of the world: Europe, Asia (including Oceania), Africa, South America, and North America. Then speculate about the extent to which you expect regional economic integration to progress in those areas in the next 10 to 25 years. Additionally, discuss the extent to which you expect global economic integration to progress during the next 25 years and which organization(s) you expect to play a major role in that process.

Answer 1

Regional economic integration happens between a group of countries within a region, where they decide with consensus, to remove or include any tariff barrier to the free flow of labor, capital, goods or services.

FTA or Free Trade Area is the most prevalent form of regional economic integration. In FTA, an economic barrier is removed by consensus and facilitates trade in that region. Various FTAs exists between Europe and Asia, which seem to flourish well with time. North and South America also enter into common market phenomena.

The various economic integrations existing in the world, concerning the major continents are:

• NAFTA: North American Free Trade Agreement
• Single European Market
• MERCOUSR
• ALADI
• Commodity Agreements

The primary advantages of regional economic integration are:

• Trade Creation
• Trade Diversion