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Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreemen

International Trade & the World Economy;  Charles van Marrewijk. CHAPTER 13; ECONOMIC INTEGRATION. Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory

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Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreemen

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  1. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  2. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  3. International Trade & the World Economy;  Charles van Marrewijk Introduction Jacob Viner (1892 - 1970)

  4. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  5. International Trade & the World Economy;  Charles van Marrewijk Types of regional economic integration Preferential trade agreement (PTA); ACP countries Free trade area (FTA); EFTA, NAFTA Customs union; EEC Common market; EU Economic union; EMU

  6. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  7. International Trade & the World Economy;  Charles van Marrewijk Neo-classical theory of economic integration Trade creation

  8. International Trade & the World Economy;  Charles van Marrewijk Neo-classical theory of economic integration Trade diversion

  9. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  10. International Trade & the World Economy;  Charles van Marrewijk Regional trade agreements COMESA countries

  11. International Trade & the World Economy;  Charles van Marrewijk Regional trade agreements ASEAN countries

  12. International Trade & the World Economy;  Charles van Marrewijk Regional trade agreements

  13. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  14. International Trade & the World Economy;  Charles van Marrewijk Regionalism and the new trade theory Using a Dixit-Stiglitz type model with the world consisting of many provinces which may form b trading blocs, welfare is non-monotonic

  15. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  16. International Trade & the World Economy;  Charles van Marrewijk Europe and the European Union

  17. International Trade & the World Economy;  Charles van Marrewijk Europe and the European Union • Establishing a common market (EEC treaty) with four freedoms: • Free movement of goods (Cassis-de-Dijon case, 1979). • Free movement of persons • Free movement of services • Free movement of capital • The main institutions of the European Union are: • The Council of the European Union • The European Commission; • The European Parliament; • The European Court of Justice • The European Central Bank (ECB)

  18. International Trade & the World Economy;  Charles van Marrewijk Europe and the European Union Green circle: former EFTA Red star: potential EU member

  19. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  20. International Trade & the World Economy;  Charles van Marrewijk Future enlargement of the European Union

  21. International Trade & the World Economy;  Charles van Marrewijk Future enlargement of the European Union

  22. International Trade & the World Economy;  Charles van Marrewijk CHAPTER 13; ECONOMIC INTEGRATION Introduction Types of regional economic integration Neo-classical theory of economic integration Regional trade agreements Regionalism and the new trade theory Europe and the European Union Future enlargement of the European Union Conclusions

  23. International Trade & the World Economy;  Charles van Marrewijk Conclusions • There are many regional trade agreements (RTAs) in the world. • We also distinguish FTAs, customs union, common market, economic union. • RTAs in general increase welfare through trade creation, but the discriminatory nature of an RTA may make the net welfare effect negative. • Increased popularity of Regionalism rather than Multilateralism may be bad for the world economy. • EU is most succesful and powerful economic integration scheme; many CEE countries want to join; EU’s political decision process needs to be revised.

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