The Regionalization of World's Economy (An analysis)

Résumé du document

The establishment of areas of integration in world trade:

The establishment of large regional areas reveals two trends. Within NAFTA, regionalization has led to an intensification of trade within the zone, while in the EU, trade stagnated. Regionalization does not imply a strong increase in intra-regional trade, it would even tend to increase the share linked to world trade. Indeed, exports of the four major free trade areas represents 60% of world trade.

The nature of regional integration agreements:The WTO applies within it what we call the clause ;most-favored nation (MFN);, that is to say, that all exporting countries benefiting from this provision is automatically applied the favorable tariff . In 1961, Balassa gave an overview of the different types of regional agreements:
- Associations and forums on economic cooperation: they aim for organizing cooperation between States on economic issues at large.
- The non-reciprocal preferential agreements: these are agreements between two countries but which benefit only one country, they are unilateral agreements.
- The area of free trade: it entails reciprocity agreements on reducing trade barriers.
- The Customs Union: in addition to being a free-trade, it takes into account certain areas of trade policy of Member States.
- The Common Market: it extends the liberalization agreements to factors of production: labor, capital and technology.
- The integration of economic and monetary policies:

This integration leads to certain macroeconomic policies common in EU countries. The first major post-war agreement is the Treaty of Rome signed in 1957. It will be followed by a swarm of agreements not only in Europe but in America or in Africa. What we can note that today all countries of the WTO have at least a regional agreement.

Extraits

[...] An area of regional integration that the level of aggregate demand in the integrated area does not remain at its initial level. If, in the area, creating effects outweigh the effects of diversion, the income increases. And if the income increases, so this may allow an increase in imports which benefit the importing countries. Thus the wealth of the area will affect other countries. If a customs union adopt a protectionist policy vis-à-vis other countries, it is possible that these countries will also launch a Customs Union to counter the Union's political rival. [...]

[...] Indeed, trade between these regions is already a kind of multilateralism. Thus, regionalization is a good chance in the sense that it is a step to multilateralism. Multilateralism is also prior to regionalism, because areas such as NAFTA and Mercosur are born of the fact that previously had formed the country adhered to the GATT. The difficulties of multilateralism to prevail at the global level are that many countries are falling back on regionalism. Today the WTO n'endiguent not neoprotectionism. [...]

[...] For Johnson, the disappearance of the adjustment through exchange rate adjustment may involve a transfer of budget areas that enjoy a favorable position to regions hit by a shock. This argument is not entirely convincing. The maintenance of fiscal independence in the EU allows national fiscal policies countercyclical. However, it is true that the autonomy of national budgets is limited by the constraints of the Maastricht Treaty and the Stability Pact. For MacKinnon, the relevant criterion of an optimum currency area is thus the ratio between the volume of traded goods and GNP. [...]

[...] The nations are current optimum currency area? The theory of optimum currency areas, as has been proposed by Mundell in 1961, is a little bit a of monetary theory "vinerienne. A currency area is "optimal" if its borders are drawn so that the net earnings, balance of advantages and disadvantages, are maxima. It is rather to assess whether the formation of a monetary zone in parts of the world improves the situation with respect to monetary cutting force. Should they be fixed? [...]

[...] The Single European Act provided for a liberalization of capital movements almost completed in 1990. Under these conditions, consistent with the theorem of incompatibility, Europe should she give up the stability of European currencies or the independence of national monetary policies? Since European countries confirmed their choice in favor of financial integration and that they believed that trade integration was conceivable that a stable exchange rate system, if not fixed, the sustainability of the European Union meant a European nations abandoned their monetary sovereignty. [...]