国际贸易英文课件：CH11 Economic Intergration

1、Chapter 11 Economic Integration,After studying this chapter, you should be able to: Identify the different types of economic integration schemes Understand the meaning of trade creation (贸易创造) and trade diversion(贸易转移) Describe the dynamic benefits of economic integration Discuss the brief history o

2、f various attempts at economic integration,1 Forms of Economic Integration,Economic integration is the commercial policy of discriminatively reducing or eliminating trade barriers only among the nations joining together. There are different forms： Preferential trade arrangements (PTA) Free trade are

3、as (FTA) Customs unions (CU) Common markets Economic unions Complete economic integration,Preferential trade arrangements(优惠贸易安排) provide lower barriers on trade among participating nations than on trade with nonmember nations. This is the loosest form of economic integration; The best example is th

4、e British Commonwealth Preference Scheme.,Free trade area(自由贸易区) removes all barriers on trade among members, but each nation retains its own barriers on trade with nonmembers. The best example is the North American Free Trade Agreement (NAFTA).,A customs union(关税同盟) allows no tariff or other barrie

5、rs on trade among members, in addition it harmonizes trade policies (such as common tariff rates) toward the rest of the world. The most famous example is the European Union (EU).,A common market(共同市场) goes beyond a customs union by also allowing the free movement of labor and capital among member n

6、ations. The EU achieved the status of a common market in 1993.,An economic union(经济同盟) goes still further by harmonizing or even unifying the monetary and fiscal policies of member states. An example is Benelux (now part of the EU). An example of a complete economic and monetary union is the United

7、States.,Complete economic integration(完全经济一体化) The highest form of economic integration; is also EUs goal. It carries out the same economic policies among member nations.,2 Attempts at Economic Integration after World War II,2.1 European Union (EU),The European Union was founded by the Treaty of Rom

8、e, signed in March 1957 by West Germany, France, Italy, Belgium, the Netherlands, and Luxembourg, and came into being on January 1, 1958. The common external tariff was set at the average of the 1957 tariffs of the six nations. Free trade in industrial goods within the EU and a common price for agri

9、cultural products were achieved in 1968; restrictions on the free movement of labor and capital were reduced by 1970. Membership increased to 15 after the United Kingdom, Denmark, and Ireland joined in 1973, Greece in 1981, Spain and Portugal in 1986, and Austria, Finland, and Sweden in 1995. It bec

10、ame 25 when Malta, Cyprus, Poland, Hungary, Czech, Slovakia, Slovenia, Estonia, Latvia, Lithuania joined the EU on May 1, 2004. Bulgaria and Romania joined it in 2007. Now it is a 27-member in total EU.,2.2 North American Free Trade Area (NAFTA),In September 1993, the United States, Canada, and Mexi

11、co signed the NAFTA, which took effect on January 1, 1994. This agreement will eventually lead to free trade in goods and services over the entire North American area. NAFTA benefits the United States by increasing competition in product and resource markets, and by lowering the prices of many commo

12、dities to U.S. consumers. NAFTA benefited Mexico by (1) Leading to greater export-led growth resulting from increased access to the huge U.S. market (2) Encouraging the return of flight capital (3) Fostering more rapid structural reforms domestically. Mexico suffered a net loss of jobs and incomes i

13、n agriculture, but these losses were more than matched by net increases in industry.,2.3 Asia-Pacific Economic Cooperation (APEC),APEC has 21 members - referred to as Member Economies - which account for more than a third of the worlds population (2.6 bill. people), approximately 60% of world GDP (U

14、S$19, 254 bill.) and about 47% of world trade. It also represents the most economically dynamic region in the world having generated nearly 70% of global economic growth in its first 10 years.,Purpose and Goals: to further enhance economic growth and prosperity for the region and to strengthen the A

15、sia-Pacific community. Since its beginning, APEC has worked to reduce tariffs and other trade barriers, creating efficient domestic economies and dramatically increasing exports. Key to achieving APECs vision are referred to as the Bogor Goals（茂物宣言) of free and open trade and investment in the Asia-

16、Pacific by 2010 for industrialized economies and 2020 for developing economies. These goals were adopted by Leaders at their 1994 meeting in Bogor, Indonesia.,3 Theory of Customs Unions,3.1 Trade Creation and Trade Diversion Trade creation occurs when some domestic production in a member of the cust

17、oms union is replaced by lower-cost imports from another member nation. This increases welfare. If all resources are fully employed before and after formation of the customs union, this increases the welfare of member nations because it leads to greater specialization based on comparative advantage.

18、 It also increases the welfare of nonmembers because some of the increase in its real income spills over(溢出) into increased imports from the rest of the world.,Trade diversion occurs when lower-cost imports from outside the custom union are replaced by higher-cost imports from another union member.

19、This is because of the preferential trade treatment given to member nations. By itself, this reduces welfare. Trade diversion reduces welfare because it shifts production from more efficient producers outside the customs union to less efficient producers inside the union. Thus, trade diversion worse

20、ns the international allocation of resources and shifts production away from comparative advantage.,Trade Creation and Trade Diversion in a Custom Union,DX and SX represent Nation 2s domestic demand and supply curves of commodity X, while S1 and S3 are the free-trade perfectly elastic supply curves

21、of commodity X of Nation 1 and Nation 3, respectively. With a nondiscriminatory 100% tariff, Nation 2 imports 30X (JH) at PX=$2 from Nation 1. By forming a customs union with Nation 3, Nation 2 imports 45X (CB) at PX=$1.50 from Nation 3. The welfare gain in Nation 2 from pure trade creation is $3.75

22、 (given by the sum of the areas of the two shaded triangles). The welfare loss from trade diversion proper is $15 (the area of the shaded rectangle). Thus, this trade-diverting customs union leads to a net welfare loss of $11.25 for Nation 2.,Since the formation of a customs union usually results in

23、 both trade creation and trade diversion, the welfare of the nation forming or joining a customs union can increase or decrease, depending on the relative strength of these two opposing forces.,Had Nation 2 formed a customs union with Nation 1 instead of with Nation 3, there would have been only tra

24、de creation and no trade diversion (this would be equivalent to having free trade) and benefits all three nations. Nation 2 and Nation 1 would gain from specialization in production and increased international trade based on comparative advantage. Nation 3 would also benefit because some of the incr

25、eased income in the customs union would spill over into a demand for more of its imports. Why Nation 2 formed a customs union with Nation 3 instead of with Nation 1 is that customs unions are formed not only for economic reasons but also for political considerations and also depend on the geographic

26、al proximity of nations.,Other Static Welfare Effects,The administration savings from the elimination of customs officers, border patrols, and so on. This benefit arises whether the customs union is trade creating or trade diverting. An improvement in the collective terms of trade for a trade-divert

27、ing customs union. However, for a trade-creating customs union, the opposite is true. Much more bargaining power in international negotiations than all of its members separately. This is the case for the EU.,3.2 Dynamic Benefits from Customs Unions,Economies of large-scale production Significant add

28、itional economies were achieved after the formation of EU by reducing the range of differentiated products manufactured in each plant and increasing “production runs”. However, it must be pointed out that even a small nation that is not a member of any customs union can overcome the smallness of its

29、 domestic market and achieve substantial economies of scale in production by exporting to the rest of the world.,Increased competition That is, in the absence of a customs union, producers are likely to grow sluggish and complacent behind trade barriers. But when a customs union is formed and trade

30、barriers among member nations are eliminated, producers in each nation must become more efficient to meet the competition of other producers within the union, merge, or go out of business. All of there efforts will cut costs of production to the benefit of consumers. A customs union must, however, b

31、e careful that larger and more efficient forms will not restrict competition.,Stimulus to investment The formation of a customs union is also likely to spur outsiders to set up production facilities within the customs union to avoid the (discriminatory) trade barriers imposed on nonunion products. T

32、hese are the so-called tariff factories. Tariff factories: direct investments made in a nation or other economic unit (such as a customs union) to avoid import tariffs. Finally, in a customs union that is also a common market, the free communitywide movement of labor and capital is likely to result

33、in better utilization of the economic resources of the entire community.,The several attempts to measure the static welfare effects resulting from the formation of a customs union all came up with surprisingly small net static welfare gains. For EU these gains were estimated to be in the range of 1 to 2 percent of GDP.