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Cross National Cooperation of Toyota Europe's Strategy
Transcript of Cross National Cooperation of Toyota Europe's Strategy
Regional economic integration
Regional trading groups comparability
The Regional Trading Groups
Reciprocal trade negotiations
Enforcement of trade agreements
The World Trade Organization (WTO)
Cross-National Cooperation and Agreements
A0223324 Minnie Chen A0223329 Mina Chang
A0223338 Alice Wu A0223332 Iris Wang
Major types of Integration
Regional Economic Integration
The Effects of Integration
Static and Dynamic Effects
Organization - ASEAN
Organized in 1967
The fourth largest FTA
Goal : Promoting cooperation in industry and trade.
Agreement - AFTA
Organization - APEC
Formed in 1989
Composed of 21 countries
To promote multilateral economic cooperation
Goal : opening regionalism
Agreement - Pan Arab Free Trade Area (PAFTA)
Its members include North Africa and the Middle East.
Goal : To reduce trade barriers among its member countries.
Council - Gulf Cooperation Council (GCC)
It is more efficient than PAFTA because of the smaller number of countries involved.
The United Nation (UN)
Established in 1945
It deals with economic development, antiterrorism, and humanitarian movements.
There are five permanent members of the Security Council
UN Conference on Trade and Development (UNCTAD)
Definition : Private nonprofit institutions that are independent of the government.
Some NGOs operate only within the confines of a specific country; however, others are international in scope.
Goal : To help developing countries participate in international trade.
Goal : Cutting tariffs on all intrazonal trade to maximum of 5 percent.
Most products traded were subject to duties from 0 to 5 percent.
It is an example of a producer cartel.
A larger category of energy commodities
Free trade area-no internal tariffs.
Customers union-no internal tariffs plus common external tariffs.
Common market-customs union plus factor mobility.
Less than 10%
Most trade gains come from FTA
Labor and capital
Harmonized monetary policies
Listed by the WTO
The North America Free Trade Agreement
January 1 ,1994
Canada, the United States,and Mexico.
Free trade in goods, services and investment.
Geographic location, trading importance,and key trade relationship - U.S.
Static effects of integration-the shifting of resources from inefficient to efficient companies as trade barriers fall.
Trade Creation –production shifts to more efficient producers for reasons of comparative advantage.
Trade diversion-trade shifts to countries in the group at the expense of trade with countries not in the group.
Powerful Trading Bloc
Tariffs and quotas elimination
Dynamic effects of integration-the overall growth in the market and the impact on a company caused by expanding production and by the company’s ability to achieve greater economies of scale.
The European Union (EU)
Is the largest and most successful regional trade group
Common external tariffs
ex large and growing market.
Investing options expanding:
ex before and after NAFTA.
Is a common currency in Europe.
Is administered by the European Central Bank.
Was established on January 1,1999.
Resulted in new bank notes in 2002.
Does not include the United Kingdom,Denmark,Sweden,or eight of new entrants to the EU.
Rules of Origin and Regional Content
Rules of Origin:
Where the goods and services originate in?
Rules of Regional Content:
At least 50% of the net cost of most products must come from the NAFTA region.
Labor and environmental standards.
Trade and investment increased.
Illegal immigration due to U.S.
Companies penetrate markets in countries where Mexico has free trade agreements.
Predictions and Outcomes
Regional Economic Integration In The Americas
Big regional market.
Sophisticated U.S. companies would run Canadian and Mexico companies out of business once the market opened up.
── Has not happened.
Looking at Mexico as a consumer market rather than just a production location.
─── Mexican income continues to rise, demand is rising for foreign products.
Caribbean Community (CARICOM)
Economic integration agreement.
Benchmarking the EU Model.
Expanding market size and attract more investment and jobs.
Central America Common Market(CACM)
Central America Free Trade Agreement(CAFTA-DR)
Established in 1991.
Partnership: Brazil ,Argentina,Paraguay,and Uruguay.
75 percent of South America's GDP.
Latin American Integration Association(LAIA)
New popped up
: UNASUR(Union of South American Nations )
fairly new and limited in influence.
Implications of the EU for corporate strategy
Companies need to determine where to produce products.
Companies need to determine what their entry strategy will be.
Companies need to balance the commonness of the EU with national differences.
General Agreement on Tariffs and Trade (GATT)
Toyota's European Drive
Key Successful Factors
The connection with EU
Setting up operations in Czech Republic and Poland
Taking advantage of entering into a joint venture with PSA Peugeot-Citroenthe
To facilitate a pan- European strategy