Block 2 Revision Flashcards
Regional Economic Integration (wild and wild 2014)
It moves the market conditions within the regional economic block, closer to those of a market economy.
What are the levels and types of regional integration? CEPCF
The common market
The Economic Union
The Political Union
The customs union
The free trade area
The free trade area
Member states remove all trade barriers between other member states. This include both tariff and non-tariff
Member states can generally set whatever barriers they like with non-members
The customs union
Largely the same as a free trade area but with a coordinated trade barrier approach to non-members
The main difference is that the customs union faces the rest of the world as a single trading entity
The common market
Here we increase the level of integration
Free trade among member states
Common trade position towards non-members
Allows free movement of factors of production such as labour and investment
Hill (2023) - common market
Demands a significant degree of harmony and cooperation on fiscal, monetary and employment policies
Economic union
Tax, monetary and fiscal policies are harmonised across member states and a single currency is formed
(Hill 2023) - such a degree of integration demands a coordinating bureaucracy and the sacrifice of significant amounts of national sovereignty
Political union
Incorporates all the aspects outlined in the types of regional integration and adds a coordinated political system to this
Levels of economic integration (Hill 2023)
📈Consistent chart going up, two axis are level of integration and complexity
Political union
Economic union
Common market
Customs union
Free trade
NAFTA
1992
US, Canada, Mexico
Lengthy negotiations to start up
Declining popularity
Free trade and poverty
Poverty rate going down in sub-Saharan Africa as gdp per capita rises
Whilst wealth has increased globally, wealth distribution in developed economies has become less equal
Benefits of regional trade integration
Increases the net aggregate trade since more items are available at cheaper prices
Improves employment opportunities
Easier to reach a consensus by being in a bloc
Negatives of regional trade agreements
Takes jobs from the home country
Hill (2023) - floods the home country with cheaper substitute goods harming domestic companies
Higher immigration
There is a disproportionate impact in some areas, thus creating many problems as the gains are uneven (Rodrik 2018)
Post war
Marshall plan - US aid payments to Western Europe - promote economic and trade recovery
Postwar European recovery was fast. Speeded up by the Marshall plan the rate of growth was the fastest ever seen In Europe
They recovered quickly through rapid re-industrialisation and trade in goods
EU trade with non-members
Machinery and transport equipment 42.7%
Chemicals and related products 18%
UK EU trade in numbers (HOC 2017)
Services accounted for 38% of the UKs exports to the EU in 2016
Wales exported the highest percentage of goods to the EU out of the UK
Immigration on the campaign trail
UKIP had the aim of leaving the EU
This was a powerful message among voters
EU migration (ONS 2021)
EU migration has dropped, with non-eu migration increasing
Classic blame arguments in immigration debates
Immigrants take our jobs
The changing face of culture threatens our traditional ways
Immigrants bring crime to our country
Note the use of ‘our’ as a narrative tool to create the associated ‘other’ category
Brexit and Trade
Exiting the EU limits access to our largest trading partner
Leave voters did not generally expect to win
Trade has steadily decreased with imports and exports
Medium term impact of brexit
Reduced EU immigration
Introduced sovereignty over national laws and trade agreement
Lower levels of trade
Lower number of workers
Context for considering de-integration
Anti-globalisation protests and the occupy wall street movements were born out of the 2007/2008 financial crisis
The case for Internationalisation
Increasing gdp among trading nations
Declining poverty rates around the world are correlated with increased internationalisation
The case against internationalisation
We have industry life cycles that leave communities heavily impacted for generations
Example - post industrial deprivation of wales
The case against internationalisation and of regional integration
Shifts in trade from non-members to members of
Shift in employment - economic migration increases competition for low skilled work
Many people feel that the future will not be better economically
Nationalism (De Cleen 2017)
It is constructed through an opposition between the nation and its out groups (De Cleen 2017)
Populism
An antagonism between the ‘people’ and the ‘elite’
It claims to represent the people against some illegitimate elite
It is a powerful political tool - used by groups who claim to act for the people in order to gain power
Example such as trumps ‘drain the swamp’ campaign - get rid of the elite
Nationalism
It creates in groups and out groups
It creates acceptable groups for us and we can take comfort by considering ourselves as members of this in-group
WEF (2016)
There is creeping protectionism and societal unease
WEF finds evidence of declining openness since 2007
NAFTA & Mexican Trucking (Hill 2023)
Because two thirds of cross-border trade within NAFTA goes by road there is debates about it
USA wanted new rules because Mexican truckers got more work as they were cheaper, tried to impose new standards on them, Mexico ended up having better standards so they removed them. This forced Mexico to retaliate and place tariffs on goods
Rodrik (2018) - what do trade agreements really do
Free trade improves productive efficiency and offers customers better choices - over the long term these gains are much larger than any effects on employment
Harmonisation of standards makes agreement between country’s difficult - struggle to track capital flows between countries
Behr (2017)
When remain voters warned about the economic consequences the attitude from leave voters was ‘that’s your gdp not mine’
Remain voter facts
David Cameron was trying to state economic benefits - no one cares
Largely nationalist people who were born in the uk were an in group for UKIP and BOJO
Poverty
Poverty is not a measure of equality it’s just the extreme of inequality
GDP rising meaning less poverty does not nessecarily mean as much in this instance
Populism example EU
Brussels bureaucrats making the decision for our country even though they do not know what is going on?
BOJO - let’s take back control
