Advantages of Regional Integration – Summary Essay.
Regional Integration The North American free trade agreement (NAFTA) is an agreement signed on January 1, 1994 between Mexico, Canada, and the United States governments. NAFTA goal is to create a trilateral trade bloc in North America to eliminate many barriers to investments and trade between the three nations. NAFTA environmental impact can also be an issue for most Mexicans. NAFTA brought the elimination of one-half of Mexico’s exports tariffs to the U.S. as well as one-third of U.S. export to Mexico.
NAFTA also seeks to protect the intellectual property rights of all products that are non-tariff.
Regional integration in the form of NAFTA brought many economical and political advantages to Mexico. Is has been positive for Mexico because we have seen a reduction on poverty rates, real income rises, lower food prices. Regional integration has been beneficial to business owners and elites in all three countries. NAFTA opened many doors for open trade, ending tariffs on various goods and services, and implementing equality between the U.
S., Canada, and Mexico. It allows agricultural goods such as eggs, corn, ad meats to be tariff- free, it also allow Mexico to freely import and export goods to north America scale.
Regional integration is an approach to economic liberation setting a distinctions between preferences are, free trade are, customs union, common markets, and economic union. A preference area constitutes to weakest form of integration and an economic union the strongest form of integration. Regional integration grants the member nations preference conditions for trade of certain specified product categories. Quotas and taxes can be removed partially or in total for those specific products. A strong regional integration allows retaining a significant amount of independence to when crating, changing, or implementing trade policies. Efficiency welfare will be maximized when there is a worldwide free trade. A general relationship between economic and growth opens.
The integration of these three actions has many advantages; it promotes global advantages for businesses. Regional integration allows countries to unified and form common markets. This will create larger markets by opening up borders, eliminating taxes and import/export tariffs between the member nations. Regional integration increase a nation economic activities overall, which in turn raises GDP and can provide better living standards for all citizens within the regional block.
Another advantage of regional integration is that the effect of a large market will increase global competitiveness. In addition not only allows economic output to increase internally, it also create an advantage in relation to other countries around the world. Moreover, the regional block can offer many more goods and services internationally than what competitors can.
Mexico is a developing country newly industrialized but it is the eleventh largest economy in the world. Mexico has an ongoing industrialization with many agriculture activities and development but is rapidly being replaced by manufacturing activities and innovation. Certain regions in Mexico have a life quality equivalent to some region in Western Europe, whereas others are equivalent to sub-saharah Africa.
Globalization plays an important factor when it considering regional integration. Any business interested in better compete in the global economy must consider regional integration.