Regional prosperity for one nation can help others in the area.
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 economies, with their influence over financial and commodity markets, can make it difficult for smaller countries to successfully build an economic system which can emerge from developing to developed status. As a result, smaller and emerging economies have banded together to take advantage of geographic and economic benefit that would otherwise be unavailable. This research examines the reasons behind such organizations, and considers whether these examples of economic integration meet the goals that their participants have.
Governments are interested in regional integration because prosperity for one region can spill over into others; this is particularly true of Europe in the 1950s and southeast Asi...