Global and regional integration

1、Global and regional integrationName:Number:Outline1. Introduction2. Body3. Conclusion4. BibiographyIntroductionRegional integration is a process whereby boundaries between nation-states become less discontinuous, thus leading to the formation of more comprehensive systems. Economic integration consi

2、sts in the linking up and merging of the industrial apparatus, administration and economic policies of participating countries, combining previously separated economies into larger arrangements.Therefore economic integration can be defined as the movement of several countries to enhance their mutual

3、 economic ties, leading to the growth of the overall economic activity, spanning national and regional boundaries. The process can be informal and does not necessarily require formal agreements. It can be seen as market-driven. It manifests itself through the increased trade flows of goods and servi

4、ces and, in the area of investment, the movement of tangible and intangible forms of capital, such as finance, technology and the ownership or control of assets. Economic integration requires the appropriate government policies and behavior, in particular the liberalization of trade and FDI regimes,

5、 the deregulation of financial markets and the promotion of domestic competition, as well as the developments of infrastructure, notably transportation and communications.BodyThe Development of Regional Economic Integration in the WorldThe epoch of free international trade started at the end of the

6、history visitors of the Second World War, Winston Churchill reflected on Second World War. In his the mistakes made by the of the First World War and counseled the victors of the Second World War to be generous. The Truman Administration heeded this wise counsel. A Marshall Plan was implemented that

7、 made it possible for the devastated Western Europe to recover and regain its economic strength. In Addition the Second World War allies created three institutions that made free international trade and development economically possible. The International Monetary Fund and the World Bank were create

8、d to preserve the stability of world currencies and treasury systems. Furthermore these established entities were in charge of aiding the rebuilding of Europe and the economic expansion of developing nations.In 1947 the General Agreement on Tariffs and Trade (GATT) was ratified. As a set of rules to

9、 govern international trade, the agreement served for forty-eight years not only as the most influential international trade norm but also as an ad hoc organization to enforce these rules and to resolve disputes concerning them.Causes of World Regional Economic Integration Growth and DevelopmentThe

10、process of integration followed by necessary economic reforms is driven by the objective to promote a new style of economic growth based on market transparency, industrial efficiency and consumer welfare. Each reform has a particular role in this endeavor. Trade liberalization should expose domestic

11、 firms to international competition, thus inducing lower prices and better products and services. Companies may benefit from economies of scale. Macroeconomic stabilization should lower the uncertainty of market signals, which includes relative prices and governments credibility. Privatization shoul

12、d cut down transaction costs by improving the supply of basic services such as telecommunications, energy and transport. Competition policy should remove entry barriers and monitor business practices. The open borders should attract foreign investment. Finally, regional integration should open new o

13、pportunities for industrial specialization and stronger international competitiveness. In summary, regionalism should broaden domestic regional markets as a precursor to exposing regional industries to the most competitive world market, thereby increasing living standards and contributing to the ove

14、rall welfare of the areas.East Asia Regional Economic IntegrationCompared with Europe and Latin America, Asia is a relative newcomer to regional cooperation. Before the 1997 Asian crisis, economic integration was primarily market-led and private-sector-driven. Few major government-led regional coope

15、ration initiatives existed, and those that did were limited to the areas of cross-border infrastructure, trade, and investment. These included, for example, the Greater Mekong Sub regional cooperation program and the ASEAN Free Trade Area, both of which were initiated in 1992.After the 1997 crisis,

16、however, the market-led process was supplemented by a series of government initiatives. In addition, the scope of government initiatives was extended to include regional cooperation in policy dialogue, money, and finance, especially in East Asia. Today, the geographic scope of cooperation initiative

17、s is expanding across sub-regions of Asia. One example of this is the framework agreement for comprehensive economic cooperation between India and the countries of ASEAN一Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam.The growing interes

18、t in economic cooperation and integration can be attributed to various factors: growing economic interdependence among countries, especially in East Asia: the popularity of regionalism elsewhere: slow progress in multilateralism, and weaknesses in the international financial architecture as demonstr

19、ated by the 1997 crisis. Perhaps the clearest evidence of Asian countries desire to forge closer economic relationships is the proliferation of Free Trade Agreements. As of last year, there were more than 30 FTAs under negotiation in East Asia alone. Increasingly, these agreements are also deeper, e

20、xtending to areas beyond just tariff reduction. An example is the recently signed India-Singapore comprehensive economic cooperation agreement, which covers not only trade in goods, but also services, investments and cooperation in technology, education, air services, and human resources.East Asia C

21、ountry Export-Import based on Variety Product AnalysisEach country has history of its own process of economic the product traded from one country to another country, we will find will find the different product traded from each country. East Asia countries also have the same condition, where country

22、 has their own traded product. We also can use product variety to understand the every trade performance proportion to between countries in East Asia region. If one country or trade one kind of goods in certain region or certain advantage in produce this region have a big because this area or this c

23、ountry good and has an absolute advantage in produce this product, at the same time here at East Asia region, every economy have the same base variety product. According to Standard International Trade (SICT), exported and imported product can be divided to 10 kinds. The 1 variety till variety numbe

24、r 4 belongs to natural product. Variety number 5 to 8 belong to manufactured product, the variety number 6 and 8 also belong to labor intensive product, and 5 and 6 belong to capital intensive product. And the last number of product belongs to future new product. China Trade Condition on Regional In

25、tegrationOne of important aspect or reason for creating Regional Economic Integration is to eliminate tariff barrier between countries in that region. We can see in East Asia region, between China and other countries already eliminate the tariff barrier among them. Based on China and East Asia Econo

26、mic Agreements, China and East Asian countries started from 2005 to eliminate tariff barrier and until 2010 most of the product traded between China and East Asia countries will not add with tariff costs. Because after creating the free trade area in this region tariff cost is getting lower and lowe

27、r than before. Because of integrated economic in this region, one domestic product of one member country can be substituted by imported product which is produced cheaper in another country, as we explained before this is called a trade creation, for some product Asian countries can import from other

28、 countries, such as China, because of this transaction China will have a bigger export value. Based on East Asian secretary report about tariff impact the trade in east Asia region, because of creating free trade area in this region China increase their import from east Asia countries to 130.08 hund

29、red million dollar, among the China total import value, China import most from Singapore, from here we can say that trade creation rate between China and Singapore is a bit large. At the same time, China export to East Asia countries also increasing to 684.22 hundred million dollar, among the China

30、total export, export to Thailand is the highest increase number 31.4 hundred million, and Philippines in the next place. Even though removing tariff barrier can increase production and consumption through trade creation, and make relationship between countries closer, but also can create trade diver

31、sion, because every member countries still maintain tariff barrier from other countries who are not member of regional economic, because of this condition, many countries that do not belong to the region will retain the sales. Discriminatory tariffs cuts mean that the non-member country loses sales

32、to less efficient producers in a member country, thus reducing world efficiency. Trade is diverted from low cost to higher cost sources. For example, China imported electronic product from United States and European countries will be switched to East Asia countries. From here we can find the benefic

33、ial effect and the undesirable effect by creating regional economic. But for a general opinion by joining the east Asia regional economic, China has more than trade diversion. China Future Trad under East Asia Economic Integration InfluencedFollowing are some recent developments that suggest that re

34、gionalism in East Asia may in fact be gathering pace.ASEAN Free Trade Area (AFTA) ASEAN was, and continues to be, an important foundation for broader regionalism in East Asia. The agreement on ASEAN preferential trading arrangements in 1977 was the first ever RTA concluded in East Asia. However, it

35、did not have any significant impact on intra-ASEAN trade vis-avis the regions overall trade with the rest of the world. This relatively low volume of trade flows among the ASEAN countries reflected their lack of economic complementary and their similar levels of industrial competence at that time. T

36、here was also a lack of serious intent to promote intraregional trade because of the perception of zero-sum competition and the continued pursuance of import substitution policies. The turning point came in 1992 when ASEAN reached a milestone agreement to establish a free trade area to help its memb

37、er economies to achieve greater trade and investment competitiveness in the global economy. The pooling of resources and markets was aimed at making ASEAN more attractive to regional and foreign investors. Multinational corporations locating in ASEAN would be able to exploit economies of scale and t

38、o rationalize production by allocating different segments of production processes among the ASEAN countries according to their respective competitive advantage. With the development of intra-regional production networks and intra-industry trade, ASEAN economies were expected to become more complemen

39、tary and integrated. The original AFTA agreement had envisaged that tariffs within ASEAN would be reduced to 0-5 percent by 2008. However, this time frame was subsequently brought down to 10 years (2003) and further to nine years (2002) in view of the agreements reached in the Uruguay Round, the pro

40、posals for APEC trade and investment liberalization, and the competitive challenges from other developing countries for export markets and foreign investments. In 1995, the ASEAN governments also extended the sector coverage to all goods, including unprocessed agricultural products. AFTA has had a d

41、ramatic impact on ASEAN economic integration. Infra-ASEAN trade doubled from $43.3 billion in 1993 to $86.3 billion in 1997. Although infra-ASEAN trade was adversely affected by the Asian financial crisis from 1997-1999, commitment to AFTA trade liberalization remained generally on track. By 2000, 8

42、5 percent of all products in the Inclusion Listl6 would have fallen to the 0- 5 percent tariff rate. This proportion is expected to rise to 90 percent by the end of 2001.This continued liberalization of infra-ASEAN trade will bring the average Common Effective Preferential Tariff (CEPT) for all the

43、ASEAN countries down from 4.43 percent in 2000 to 3.96 percent by 2001.17 Apart from conventional tariff reductions, ASEAN has since 1995 also concluded a number of framework agreements aimed at enhancing regional cooperation in areas such as trade facilitation, investment, intellectual property rig

44、hts, services, e-commerce, and transport and communications. The intent of these framework agreements is to push regional cooperation beyond the efforts undertaken at the multilateral level.ConclusionFrom the global economic and regional economic background, even though in East Asia region many coun

45、tries already worked hard to implement integrated economic in this region, but basically if we compare to European Union and America region we can see that in East Asia still in far backward condition. Regional economic really bring a big impact to member countries trade performance, in the next sta

46、ge can really influence the country economic growth. Because of some reasons mentioned before many countries started to concern about regional economic. China included one of countries that concern about regional economic, as a one of country that have a high trade surplus, Chinese government contin

47、uously maintain a high portion of international transaction from they total economic. So East Asia regional economic integration will be one important problem that Chinese government really concern about. By joining East Asia regional economic integration will have important meaning to China economi

48、c development in the future time.In this thesis we make following conclusion: first, by creating East Asia Regional economic integration China will be positively impacted. We can see the recent condition, existing Regional economic in East Asia made China increased their trade volume performance. By

49、 joining the regional economic, China obtains many positive economic impacts. From the annually statistical data we find that China trade volume in East Asia regional is increasing significantly by year to year and the changes is fairly high compare to other regional economic. Regional economic also have positive and negative implication to every country included in the regional economic, China absolutely need to join East Asia regional e