ADM 3318 Chapter Notes - Chapter 8: Mercosur, Trade Creation, Maastricht Treaty

• School: University of Ottawa
• Department: Administration
• Course: ADM 3318
• Professor: Pranlal Manga

Document Summary

Regional economic integration: agreements among countries in a geographic region to reduce and ultimately remove tariff and non-tariff barriers to free flow of goods, services, and factors of production between each other. Examples: nafta (canada, us, and mexico); eu (european union); mercosur (uraguay); safta (south america); apec (pacific nations). The move toward rei can potentially benefit consumers but not firms. Several levels of economic integration are possible in theory. From least integrated to most integrated they are: free trade area: all barriers to the trade of goods and services among member countries are removed. No tariffs, quotas, subsidies, or admin. impediments are allowed to distort trade between member states. Each country, however, is allowed to determine its own trade policies with regard to non-members. European free trade association (efta), north american free trade agreement (nafta: customs union: eliminates trade barriers between member countries and adopts a common external trade policy.