Question

Directions: Select one of the following: (a) Regional economic integration in the Americas, (b) Regional economic integration in Latin America, (c) Regional economic integration in Asia, or (d) Regional economic integration in Africa. Answer the following questions:

1. Who comprises the group?   
2. Do sub-groups exist? If so, who are they?
3. What was the origin?
4. What does it involve?
5. What impact does it have on international business?
6. What are the benefits of the organization?
7. What are the consequences?

Answer 1

Regional economic integration means free trade,investment ,capital flows,free flow of finance,free movement of people etc in the region.In Asia, regional economic integration has taken the form of free trade of goods and services within the region.There has been some investment as well. Inter regional trade has been high within Asia between East Asia and South east Asia. The trade has been between 10 ASEAN countries and also South Korea,Japan and China.

The sub groups are the member countries of SAARC.They are Afghanistan, Maldives,Bangladesh ,Bhutan,Nepal ,Pakistan , Srilanka, India.

In order to bring economic growth, some degree of cooperation between nations is necessary which will lead to free flow of goods and services and so it originated.

It involves economic integration between two or more countries and try to get away with economic barriers ,achieve economic inter dependence and increase productivity.

In international business there will be enhancement of cooperation.Regional integration will lead to business initiative with broader security.It enhances global advantages for business.

Advantages of regional integration are it gives countries the benefit of having common market.This will open up borders and make large markets.There will be no import and export tariffs between countries.

The consequences are such integration makes the small nations strong and they have a voice in the world.They have low bargaining power and high negotiation cost and so are in a less advantageous position.Regional integration also leads to economic growth.