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A specific case of Regionalisation: the ASEAN

  • What about?
  • A Regional Policy to attract FDI
  • The contrast among the members

The effects of Regional Trade agreements over global trade

1997

1995

1999

1984

What about ASEAN?

The contrast among the members

  • Made in 1967
  • 5 formers countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand.
  • 600 million people
  • Including almost all the countries in its geographic area (except Eastern Timor)
  • Organization's aim: promote free-trade and develop economic growth
  • There is one economical leader in ASEAN: Singapore
  • Not every countries in the ASEAN take benefit of the "spillover effect" from the FDI: Myanmar, Lao or Cambodia are trying to adapt to the free-trade doctrine, but their old Marxist-Leninist politic system doesn't match with a foreign market penetration.
  • The foreign market penetration is higher in the 5 formers States (+Vietnam) than the New States, who need an economic transition to free-trade.
  • Regional Trade Agreements (RTA) imply new state politics

  • Entering a free trade zone has several effects on trade balances

A regional policy to attract FDI

  • The role of the "triple effects" from FDI to develop the economic growth:
  • the direct effect (employment+training)
  • the multiplier effect (consumption growth)
  • the spillover effect (indigenous firms acquire their own knowledge and are becoming competitive)
  • A policy based on attracting FDI which offers benefits to its members:
  • Direct benefits (directly on GDP growth)
  • Indirect benefits (poverty reduction, consequences on social sphere)

Effects of RTAs within states

Effects of RTAs on trade

  • Trade creation : 

When imported goods are lower as a result of fall in price from the elimination of tariffs in the free trade area. 

  • Trade diversion :

RTA may implement common external tariffs, therefore imported goods from countries outside the free trade zone are likely to cost more. Ex :UK's import of lamb before and after joining the EU

  • Static effect in the free-trade zone :

Each country focuses on its main subsidiaries in order to export

  • Dynamic effect :
  • Competitiveness
  • International investments

Introduction:

Several meanings of "Regionalization"

PB: How Regionalization can be regarded as a model of growth?

An obstacle to World free-trade

  • Regions :

"intermediate form of community," between the national community of the state and the potential global community of humankind (Whiting 1993, 20)

  • Regionalization within the state :

"dividing political entities into smaller jurisdictions"

  • Regionalization of global economies : trade agreements between regions, or group of states with or without geographical boundaries

  • What about free-trade and WTO role?
  • The WTO and Regionalization:
  • Same principles
  • Same aims
  • The great paradox: to a Regional protectionism

What about free-trade and WTO?

The great paradox: to a Regional protectionism

Conclusion

The multiplication of Trade agreements

  • The concept of free-trade englob the free movement beyond domestic borders
  • Progressive lowering of taxes
  • WTO => a global forum about trade negotiations
  • WTO is regarded as a role of legislator, judge or even policeman between its memberships

Regionalism & Regional Organizations promotes the principles and the same aims regarding to the WTO.

BUT by creating a local free-trade zone area, there is also an indirect form of protectionism.

The WTO and Regionalization process

WTO & Regionalization: same principles, same aims.

Same vision concerning free-trade:

  • Free circulation of goods/services
  • Non-discrimination between countries

Same aims and rules:

  • Free trade reaches growth & development
  • Free trade has a political ambition
  • Free trade has to be done on a loyalty surrounding.
  • The regionalisation can be considered as a consequence of the globalization and the World Trade organization anti-protectionism doctrine.
  • The best case of successful regional organization was initially the E.U. and many others grew up such as ASEAN.
  • However, there are a lot of contrasts in every free-trade zone (wealth difference, economic integration level, etc) that need to be balanced.
  • Definition of Regionalization according to WTO
  • Objectives of Regionalization
  • The different areas concerned by this phenomenon
  • Who are those Organizations?

The different areas concerned by this phenomenon

Economic regional organizations in the World

Definition & Objectives of Regionalization

  • Definition of Regionalization according to the WTO: "The recognition that an exporting region (part of a country of a border-straddling zone) is disease-free or pest-free (or has a lower incidence)"
  • Regionalism => trendy in the WTO
  • Establishment of a free-trade area by customs union, common market, economic union, or economic integration (partnerships).
  • Strong geographical polarization of trades

Who are these Organizations?

  • ASEAN
  • MERCOSUR
  • E.U.
  • NAFTA ("ALENA")

Different waves of regionalism:

1950's-1960's => EEC in Western Europe. EFTA in 1960

Regionalization and its effects on growth

Thanks for your attention!

PB: How Regionalization can be regarded as a model of growth?

I) The multiplication of Trade Agreements

by Clara Arnaud

II) The effects of Regional Trade agreements over global trade

by Hugo Salvador

III) An obstacle to free-trade

by Anaïs Zelie

IV) A specific case of Regionalization: the ASEAN

by Arnaud Frappier

Arnaud, Hugo, Clara, Anaïs

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