Economic Integration Latam Flashcards
Define Economic Integration
cooperation of countries to: reduce or eliminate barriers for the international flow of products, people or capital
goal: reduce costs and increase trade
Name the Levels of Integration and explain briefly
5
1) Preferential Trade Agreements
2) FTA: reduction of tariffs between members
3) Customs Union: common external tariffs
4) Common Market: free movement of capital and services
5) Economic Union: free movement of labor & common monetary and fiscal policy, for example EU
6) Political Union: common government
explain Preferential Trade Agreements a bit further. what does it usually involve?
PrTrAg
PrTrAg: participating countries lower tariffs for certain products with resprect to each other but not to the rest
usually involves trade quotas
explain FTA
group of countries eliminate tariffs between themselves but maintain their own external tariffs on imports for the rest of the world
what is a customs union?
a group of countries agree to eliminate tariffs between themselves + set a common external tariff on imports for the rest of the world
EU also represents a CU
u only have to pay when passing the border to CU. within CU you can move freely
define common market
- free trade in goods and services
- common external tariffs among members
- free mobility of capital and labor
What does Economic Union include on top?
- free trade in good and services
- common external tariffs
- free mobility of capital and labor
AND - share fiscal spending responsibilities to a supra-national agency
what does a complete economic integration involves?
complete harmonisation of all policies, rates and economic rules
Name 3 trading blocks in America
NAFTA, Pacific Alliance (Chile, Peru, Colombia,Mexico), Mercosur
what was the objective of MERCOSUR and when was it founded?
who is involved right now?
1991, for a free movement of goods, services and factors of productions between countries
all South American countries are linked to MERCOSUR, either as member st
ate or associate member
what is the goal of Pacific Alliance?
what are the members?
free movement of goods, services, capital and people AND to promote greater competitiveness and economic growth ( sharing intellectual property, regulatory framework,gender innovation)
Chile, Peru, Colombia, Mexico
representing 36% of LAC
