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International Business Ch. 8
Regional Economic Integration
28
Business
Undergraduate 3
03/04/2010

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Term
Regional Economic Integration
Definition
Agreements among countries in a geographic region to reduce, and ultimately remove tarif and nontariff barriers to the free flow of goods, services and factors of production between each other.
Term
Free Trade Area
Definition
An area in which all barriers to the trade of goods and sercies among member counties are removed.
Term
European Free Trade Agreement (EFTA)
Definition
The most enduring free trade area in the world, which focuses on free trade in industrial goods and currently includes Norway, Iceland, Liechenstein and Switzerland.
Term
Customs Union
Definition
A group of countries committed to eliminating trade barriers and adopting a common external trade policy.
Term
Common Market
Definition
A group of countries committed to eliminating trade barriers, adopting a common external trade policy and allowing factors of production to move freely between members.
Term
Economic Union
Definition
A group of counties committed to removing trade barriers adopting a common currency, harmonizing tax rates and pursuing a common external trade policy.
Term
Political Union
Definition
A central political apparatus coordinating the economic, social and foreign policy of its member states.
Term
Trade Creation
Definition
Trade created within a free trade area due to the replacement of high-cost dometsic or external producers by low-cost external producers.
Term
Trade Diversion
Definition
Trade diverted within a free trade area when lower-cost external suppliers are replaced by higher-cost external suppliers.
Term
European Union (EU)
Definition
The regtional economical union of most European countries, formed as a result of the 2 world wars and the European nations' desire to hold their own in the world's political and economic stage.
Term
Treaty of Rome
Definition
Signed in 1957, established the EC and was the forerunner of the EU and created the common European market.
Term
European Commission
Definition
Responsible for proposing, implementign, and monitoring comliance with EU legislation: run by a group of commissioners appointed by each member country.
Term
European Council
Definition
The ultimate decion-making body of the EU. It passes legislation from the commission into law and is comprised of one representative from each member state's governments.
Term
European Parliment
Definition
Made of 732 meners directly elected by memer states' populations, it serves as a consultative body to debate and propse amendments to the legislation forwarded from the council.
Term
Treaty of Lisbon
Definition
2007 treaty designed to increase the power of the European Parliment.
Term
Court Justice
Definition
Comprised of one judge from each member state, this is the supreme appeals court for the EU law.
Term
Single European Act
Definition
Adopeted by memers of the EC in 1987, this act committed member countries to establish a single market by the end of 1992.
Term
Maastricht Treaty
Definition
A 1991 treaty committing members of the EC to adopt a common currency by 1999.
Term
Optimal Currency Area
Definition
An area of counties where similarities in the underlying econimic activity structure make it feasible to adopt a single currency and use a single exchange rate.
Term
North American Free Trade Agreement (NAFTA)
Definition
The free trade agreement among Canada, Mexico and the US and officially implemented in 1994.
Term
Andean Pact
Definition
Based on the EU and begun in 1969. Agreement unites Bolivia, chile, Ecuador, Colombia, and Peru in free trade but, it had been unseccessful at achieving its states goals; renamed Andean Community in 1997.
Term
MERCOSUR
Definition
The free trade pact among Brazil, Argentina, Paraguay, Uruguay and Venezuela, originating in 1988.
Term
Central American Common Market
Definition
A trade pact among Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, which began in the early 1960s but collaped in 1969 due to war.
Term
Cental American Free Trade Agreement (CAFTA)
Definition
The agreement of the member states of the central american common market joined by the Domincan Republic to trade freely with the US.
Term
CARICOM
Definition
Established in 1973 to promote a customes union between the English-speaking Caribbean countries by 1991, but it failed.
Term
Caribbean Single Market and Economy (CSME)
Definition
Unites 6 CARICOM members in agreeing to lower trade barriers and harmonize macroeconomic and monetary policies.
Term
Association of Southeast Asion Nations (ASEAN)
Definition
An attempt at regional economic integration among Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, The Philippines, Singapore, Thailand and Vietnam.
Term
APEC
Definition
An organization designed to increase multilateral economic cooperation between nations bordering the Pacific Ocean.
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