The Role of Regional Integration

The Role of Regional Integration

Global Business as pertaining to our topic describes changes in our world’s economy that result from dramatically increased internationational trade and cultural exchange. This paper will analyze the role of NAFTA (North American Free Trade Agreement) in promoting global business. Besides NAFTA, regional integrations such as: EU, APEC, ASEAN, CAFTA, or others may be discussed for the purpose of comparing advantages and disadvantages of regional integration. Also discussed will be the economic development stages of countries within NAFTA (United States, Canada, and Mexico) and any ramifications of NAFTA development for global business.

NAFTA

NAFTA is an agreement between Canada, the US, and Mexico that took effect on January 1, 1994, designed to increase the scope for the free flow trade and investment among these three countries. It includes measures for the elimination of tariffs and non-tariff barriers to trade, as well as many more specific provisions concerning the conduct of trade and investment that reduce the scope for government intervention in managing trade.

Role of NAFTA in promoting global business

Regional integration is a formation of closer economic linkages among countries that are geographically near each other, especially by forming preferential trade agreements. On the other hand, regional integration also refers to an outcome, occurring when pre set criteria are met. Over the last couple of decades, we have seen an increase in the number and depth of regional integration agreements around the world. Over 40 % of world trade occurs within regional integration agreements like the European Community and the NAFTA and new or expanded agreements continue to be negotiated. A regional integration