There are some 200 economic integration agreements in effect around the world al
ID: 1167519 • Letter: T
Question
There are some 200 economic integration agreements in effect around the world already, far more than even a few years ago. Virtually every country is now party to one or more free trade agreements. Supporters argue that free trade is good for nations.
What is the basis for their support? That is, what are the specific benefits that countries seek by joining an economic bloc?
What is the main economic bloc for your country?
From your perspective, what advantages has bloc membership brought to your country?
What disadvantages has bloc membership produced?
Explanation / Answer
Economic integration simply refers to the integration of several economies through creation of block whih facilitates fre movement of trade, capital, investment, labor, in high level of integration there also exist integration of economic, political policies. Free trade agreement is also a primary level of integration that refers to an agreement between nations that would facilitate free flow of goods, services, capital , investment etc across borders. There would no barriers (tarriff and non tarriff) to such flow.
Many countries get into these kinds of agreements and create blocks such as Economic Union, NAFTA, SAPTA, SAFTA, ASEAN etc because free trade and membership of such integration brings multiple benefits to nations, few of which are as follows:
NAFTA, the North American Free Trade Agreement, is an example of a trade bloc agreement involving Canada, Mexico and the United States.
International Democracy Watch says NAFTA benefits the nations involved by promoting regional cooperation. All three countries make money from their mutual trade, so they have a vested interest in each other's stability.
Trade and Investment Flows Have Substantially Increased of US because of NAFTA. From 1993 to 2006, trade among the NAFTA nations climbed 198 percent, from $297 billion to $883 billion. Employment has increase in US. The employment in US rose from 112.2 million in December 1993 to 137.2 million in December 2006, an increase of 25 million jobs, or 22 percent. The average unemployment rate was 5.1 percent in the period 1994-2006, compared to 7.1 percent during the period 1981-1993.
Every coin has two sides. Similarly economic blocks have some drawbacks as well: