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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)