Question

participates in regional economic integration. The firm needs to understand what is nappening in that trade Dioc and the erect It WIII have on the firm's strategy and operations.

The creation of a single market through regional economic integration offers significant opportunities because markets that were formerly protected from foreign competition are increasingly open. Opportunities arise from the inherently lower costs of doing business in a single market. Even after the removal of barriers to trade and investment, differences in culture and competitive practices often limit the ability of companies to centralize production. A major threat to businesses is that with lowered trade barriers, the business environment can become even more competitive. Firms can also be shut out of markets if they do not have a local presence. 

Select the most appropriate trade agreement for each description. 

1. Far less successful than the UE, it had all but collapsed in the 1980s. Some growth was seen after adoption of free market economic policies. Negotiations on the creation of a free trade area are proceeding at a very slow pace. (Click to select) ) eBook 

2. Agreement ratified by all three countries and went into effect January 1, 1994. Click to select) ) References 

3. Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic are at the core with an invitation for the United States for bilateral talks. Click to select) ) 

4. Paraguay and Uruguay became members in March 1990, and in 2006, Venezuela joined but has yet to be fully integrated. Click to select) ) 

5. Environmental and job loss fears did not materialize. (Click to select) =)

 6. Venezuela joined at one point but has since withdrawn. Click to select) 

7. After an earlier attempt failed following a war between two participants, a new impetus came in 2003 when the United States signaled its intention to enter into bilateral trade negotiations with the group. Click to select) ) 

8. Trade between the four core members quadrupled between 1990 and 1998, but recession created major problems.

Answer 1

Ans 1: Andean Community

Explanation: The Andean community is free trades are created to establish a customs union comprising of the South American countries. It includes Bolivia, Ecuador, Columbia, Chile and Peru. It was formed in 1969 by the Cartagena Agreement. Venezuela joined in 1973 but withdrew in 2006. Chile withdrew in 1977. Peru decided to suspend its membership in 1992 but resumed it in 1997.

Ans 2: NAFTA

Explanation: The North American free-trade agreement signed by Canada, Mexico and the United States. It created three-country trade bloc in North America. The agreement came into force on January 1, 1984 superseding all other agreements. From 1993 to 2004, the NAFTA’s partners grew by 250 percent. Today Canada and Mexico are the number one and two partners of the USA.

Ans 3: CAFTA

Explanation: Central American free trade agreement signed in 2004 continued to eliminate most tariffs, customs duties and trade barriers between the countries of Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Nicaragua, and the united states. It was the first free trade agreement between the USA and developing countries.

Ans 4: Mercosur

Explanation: Mercosur is an economic and political bloc comprising Argentina, Brazil, Paraguay, Uruguay, and Venezuela. It was created with the intention to improve trade relations. It realized some initial success when trade increased by 10 fold within the group in the 1990s. Mercosur has failed to match the expectations of integrating the bloc. It is primarily because of dictatorships and military rule in Argentina and Brazil. Mercosur’s one-year suspension of Paraguay in 2012 and indefinite suspension of Venezuela in 2016 revealed fractures in the group.