Integration Among Developing Economies

Lower trade barriers among participating countries.

Increased trade among participating nations can lead to increased prosperity.

Manipulation of single commodity to members' benefit.

Advantages to Participating Countries

Reduction in economic barriers to trade among participating countries.

Reduction in noneconomic barriers to trade among participating countries.

Advantages to Nonparticipating Countries

Reduction of import costs due to greater efficiency and lower prices in companies located in participating nations.

Increase in exports due to greater prosperity among consumers in participating nations.

Disadvantages of Integration for Participating Countries

Inability to fully develop global market for goods.

Retaliation by nonparticipating nations (trade wars).

Disadvantages of Integration for Nonparticipating Countries

Increase of trade barriers on those countries not included in the integration.

Trade distortions result in importers buying from countries not necessarily producing at the lowest cost.

In today's global economy, several large economies (Japan, the United States, Germany) dominate the world market. These econom

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to establish a single currency for the region, although this latter idea is running into difficulty. The North American Free Trade Agreement (NAFTA), only recently ratified, eliminated many trade restrictions among Canada, the United States and Mexico, but has led to criticism from Latin America that the northern agreement will harm South American economies ("Rich North," 1994, p. 15). The Association of Southeast Asian Nations (ASEAN) is an example of small regional economies seeking to gain economic strength through integration. The Organization of Petroleum Exporting Countries (OPEC) represents not a geographic union, but an economic union focused on a single product. OPEC has used its economic influence to strategically manipulate the price of oil to its members' benefit. Advantages of Integration The immediate benefit to participants in economically integrated blocs is the reduction in tariffs and other barriers to trade which may otherwise be present. Economic barriers to trade, such as tariffs and quotas, are the most obvious way in which economic integration can help nations expand their markets with geographically close nations (Pomfret, 1993, p. 1437). By reducing tariffs and fees, nations effectively reduce the
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Approximate Pages = 6 (250 words per page)

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