Week 9 Flashcards
What are purposes of regionalism?
- Military alliance
- Political
- Economic
What is an RTA?
It is a trade agreement between two or more countries, usually located in the same region of the world, in which each country offers preferential market access to the other
What are the 2 main types of regionalism?
- Free Trade Areas
2. Customs Unions
What are features of the FTAs?
o Remove barriers (tariffs) between members
o Keep individual barriers to non-members
What are features of Customs Unions?
o Remove barriers (Tariffs) between members
o Common barriers to the outside world
o Can entail unification at the deeper level – institutional, policy, currency, standards and procedures.
o Historically a precursor to state formation.
o Process of transferring sovereignty.
What was the intention for GATT Art. 24?
Allow for full integration (100% only) for the formation of new states or quasi-states
What is Trade Creation?
“[T]rade creation means that a free trade area creates trade that would not have existed otherwise. As a result, supply occurs from a more efficient producer of the product. In all cases trade creation will raise a country’s national welfare”
What is Trade Diversion?
“[T]rade diversion means that a free trade area diverts trade, away from a more efficient supplier outside the FTA, towards a less efficient supplier within the FTA. In some cases, trade diversion will reduce a country’s national welfare but in some cases national welfare could improve despite the trade diversion”
What does regionalism do?
It secures access to: o Markets o Economies of scale o New technology and investment o Competitive stimulus o Policy initiatives and innovations
Does the APEC have economies as members e.g. Taiwan and Hong Kong?
Yes
Who are the members of the EAS?
ASEAN, China, India, Japan, SK. Aus and NZ
Do RTAs institutionalise discrimination?
Yes
