PART TWO Chapter 10

1. PART TWOChapter 10 Economic Integration: Customs Unions and Free Trade Areas 经济一体化：关税同盟与自由贸易区 Lecturer: Yu Bin

2. Introduction • In this chapter ,we examine economies integration in general and customs unions in particular. • Preferential trade arrangements （特惠贸易协定）provide lower barriers on trade among participating nations than on trade with nonmember nations. This is the loosest form of economic integration. • A free trade area （自由贸易区）is the form of economic integration wherein all barriers are removed on trade among members, but each nation retains its own barriers to trade wit h nonmembers.

3. Introduction • A customs union （关税同盟）allows no tariffs or other barriers on trade among members (as in a free trade area), and in addition it harmonizes trade policies (such as the setting of common tariff rates) toward the rest of the world. • A common market （共同市场）goes beyond a customs union by also allowing the free movement of labor and capital among member nations . • An economic union （经济联盟）goes still further by harmonizing or even unifying the monetary and fiscal policies of member states .This is the most advanced type of economic integration. • An interesting recent development that can be analyzed with the same concepts used to analyze customs unions is duty-free zones （免税区）or free economic zones （自由贸易区）.

4. Trade-Diverting Customs Unions贸易创造关税同盟 之Trade Diversion贸易创造 • Trade diversion occurs when lower-cost imports from outside the customs union are replaced by higher cost imports from a union member. This results because of the preferential trade treatment given to member nations. • A trade-diverting customs union results in both trade creation and trade diversion, and therefore can increase or reduce the welfare of union members, depending on the relative strength of these two opposing forces.

5. Illustration of a Trade-Diverting Customs Union贸易创造关税同盟的说明 • The effects of a trade-diverting customs union are illustrated in the Figure. In this figure, Dx and Sx are the free trade perfectly, elastic supply curves of Nation 1 and Nation 3, respectively. With a nondiscriminatory 100 percent tariff on imports of commodity X, Nation 1 at Px=$2, along 50X(GH),with 20X(GJ)produced domestically and 30X(JH)imported from Nation 1.Nation 2 also collects $30(JMNH)in tariff revenues. • FIGURE: A Trade-Diverting Customs Union. Dx and Sx represent Nation 2’s domestic demand and supply curves of commodity X,while S1 and S3are the free trade perfectly elastic supply curves of commodity X of Nation1 and Nation 3,repectively.

6. Px($) X Illustration of a Trade-Diverting Customs Union贸易创造关税同盟的说明 Sx 5 4 3 2.5 2 1 E J H G K S1+T A S1 M N C B Dx Z V U W O 10 20 30 40 50 60 70 80

7. Dynamic Benefits from Customs Unions关税同盟的动态效益 • Besides the static welfare effects discussed earlier, the nations forming a customs union are likely to receive several important dynamic benefits. These are due to increased competition, economies of scale, stimulus to investment, a better utilization of economic resource. This will be examined in return. • 最大的动态效益是可能出现的竞争的加强； • 由于市场的扩大而带来的规模经济； • 利用市场扩大的优势来刺激投资和应付越来越激烈的竞争； • 就关税同盟内部而言，其本身就是一个共同市场，在其范围内的劳动和资本是自由流动的。

8. The European Union欧盟 • The European Union (EU), then called European Common Market, was founded by the Treaty of Rome, signed in March 1957 by West Germany, France, Italy, Belgium, the Netherland, and Luxembourg, and came into being on January 1,1958.The common external tariff was set at the average of the 1957 tariffs of the six nations. Free trade in industrial goods within the EU and a common price for agricultural products were achieved in 1968; restrictions on the free movement of ; labor and capital were reduced by 1970. • 欧盟委员会是欧洲联盟（简称欧盟EU）的3大主要机构之一。欧盟的前身是欧洲共同体。目前，欧盟有28个成员国。欧盟总部设在比利时首都布鲁塞尔。欧盟的3大主要机构为：欧洲理事会、欧盟委员会和欧洲议会。

9. The European Union欧盟

10. Case Study: Economic profiles of the EU, NAFTA and Japan欧盟、北美自由贸易区、日本的经济状况 • Table provides an economic profile of the nations of the European Union (EU), the North American Free Trade Area (NAFTA), and Japan in 2001. • The table shows that the EU has 91 percent of NAFTA’spopulation,73 percent of its gross national income (GNI), and 84 percent of its average GNI per capita, and that its exports and imports exceed NAFTA’s (if EU intra-bloc trade is counted as foreign trade) by 87 and 49 percent, respectively. • Japan has 31 present of its GNI,28 percent of its exports,22 percent of its imports, and 41percent higher per capita GNI.

11. Case Study: Gains from the Single EU Market统一欧洲市场的所得

12. The European Free Trade Association 欧洲自由贸易联盟 • IN 1960 the free trade area known as the European Free Trade Association (EFTA) was formed by the outer seven nations: the United Kingdom, Austria, Denmark, Norway, Portugal, Sweden, and Switzerland, with Finland becoming an associate member in 1961. • The EFTA achieved free trade in industrial goods in1967,but only a few special provision were made to reduce barriers on trade in agricultural products.

13. Attempts at Economic Integration among Developing Countries发展中国家的经济一体化尝试 • The success of the EU encouraged many attempts at economic integration among groups of developing nations as a means of stimulating the rate economic development. Most of these attempts, however, met with only limited success or even failure. • 1、中美洲统一市场CACM • 2、拉美自由贸易协定LAFTA • 3、南部共同市场MERCOSUR • 4、美洲自由贸易区FTAA • 5、加勒比海自由贸易协定CARIFTA • 6、东非经济共同体 • 7、西非经济共同体 • 8、东南非19国优惠贸易区 • 9、东南亚国家联盟ASEAN

14. Economic Integration in Central and Eastern Europe and in the Former Soviet Republics 东欧和前苏联的经济一体化 • In 1949, the Soviet Union formed the Council of Mutual Economic Ass (CMEA or COMECON) with the communist bloc nations in Eastern Europe (Bulgaria, Czechoslovakia, East Germany, Hungary, Poland, and Romania) plus Mongolia (Cuba, North Korea, and Vietnam joined later). The purpose of this agreement was to divert trade from Western nations and achieve a greater degree of self-sufficiency among communist nations. • 在经互会成员中，国家通过若干个国家贸易公司(State trading companies)来决定和控制所有的国际间交易。 • 经互会成员国之间的贸易一般是以双边协议和大量采购为基础的。

15. Per Capita Income of Transition Economies转型经济国家的人均收入

16. Thank you for listening • That’s all for this Chapter • 谢谢！本章结束

17. CHAPTER 11 International Trade and Economic Development 第十一章 国际贸易与经济发展

18. The Importance of Trade to Development贸易对发展的重要性 • In this section, we first analyze the claim that international trade theory is irrelevant for developing nations and to the development process. Then we examine the ways in which international trade operated as an “engine of growth” for the so-called regions of recent settlement in the nineteenth century and the reasons it can no longer be relied upon to the same extent by today’s developing nations. • We will complete this section on a positive note by examining all of the important ways in which international trade can still contribute to the process of economic development today.

19. Trade Theory and Economic Development 贸易理论与经济发展 • According to traditional trade theory if each nation specializes in the production of the commodity of its comparative advantage, world output will be greater and, through trade, each nation will share in the gain. • With the present distribution of factor endowments and technology between developed and developing nations, the theory of comparative advantage thus prescribes that developing nations should continue to specialize primarily in the production of and export of raw materials, fuels, minerals, and food to developed nations in exchange for manufactured products.

20. The Contributions of Trade to Development贸易对发展的贡献 • Even though international trade cannot in general be expected to be an “engine of growth” today, there are many ways (besides the static gains from comparative advantage) in which it can contribute to the economic growth of today’s developing nations.

21. The Terms of Trade and Economic Development贸易条件与经济发展 • We first define the various terms of trade. We then analyze the alleged reasons for expecting the commodity terms of trade of developing nations to deteriorate. Finally, we present the results of some empirical studies that have attempted to measure the change in developing nations’ commodity and income terms of trade over time.

22. Case Study :The East Asian Miracle of Growth and Trade东亚贸易与经济增长的奇迹 • Table shows the average growth rate of real GDP and trade in the High-Performance Asian Economies (HPAEs). These include HongKong, Korea, Singapore, and Taiwan (the so-called four “tigers”, which started rapid growth in the 1960s),and Malaysia, Indonesia, Thailand, and especially China, which followed them in the high-growth path in the 1970s and 1980s.Because of its spectacular growth, China is in a class by itself. Data on Taiwan (Chinese Taipei) are not available. • *

23. TABLE Average Growth of Real GDP and Trade in HPAEs,1980-19951980-1995年亚洲经济高增长国家或地区实际GDP和贸易平均增长率

24. Export Instability and Economic Development出口波动与经济发展 • Independently of deteriorating long-run or secular terms of trade, developing nations may also face large short-run fluctuations in their export prices and earnings that could seriously hamper their development. In this section, we concentrate on this short-run instability. We first analyze from a theoretical point of view the causes and effects of short-run fluctuations in the export prices and earnings of developing nations. • *

25. International Commodity Agreements国际商品协定 • The stabilization of export prices for individual producers in developing nations could be achieved by purely domestic schemes such as the marketing boards set up after World Ⅱ.These operated by purchasing the output of domestic producers at the stable prices set by the board, which would then export the commodities at fluctuating world prices. In good years ,domestic prices would be set below world prices so that the board could accumulate funds, which it would then disburse in bad years by paying domestic producers higher than world prices. • *

26. Import Substitution versus Export Orientation进口替代与出口导向 • We now examine the reasons why developing nations want to industrialize and the advantages of industrialization through import substitution versus exports. • We will then evaluate the results of the policy of import substitution, which most developing nations chose as their strategy for industrialization and development during the 1950s,1960s,and 1970s. • Afterward, we will examine the subsequent trend toward trade liberalization in most developing countries.

27. Case Study 11.4 The Growth of GDP of Rich Countries, Globalizers, and Nonglobalizers • 富裕国家、全球化国家与非全球化国家的GDP增长 • Table shows that globalizing developing countries (the so-called globalizers) grew much faster than rich countries and nonglobalizing developing countries (i.e.,than the nonglobalizers) during the past two decades. Furthermore, while rich countries and nonglobalizers grew faster than globalizers during the 1960s and 1970s,globalizers grew much faster during the 1980s and 1990s.

28. TABLE Average Growth of Real GDP of Rich Countries, Globalizers, and Nonglobalizers,1960s-1990s富裕国家、全球化国家与非全球化国家的GDP增长

29. Current Problems Facing Developing Countries发展中国家面临的问题 • In this section, we examine the most serious problems facing developing countries today. These are: • (1)the conditions of stark poverty prevailing in many countries, particularly those of Sub-Saharan Africa; • (2)the unsustainable foreign debt of some of the poorest developing countries; • (3)the remaining trade protectionism of developed countries against developing countries’ exports. Let us briefly examine each of these problems.

30. Poverty in Developing Countries发展中国家的贫困问题 • Table 11.7 gives the population and the per capita income of various countries or groups of countries in 2001,as well as the growth in real per capita income from 1985 to 2001 and infant mortality and life expectancy in 1980 and 2000.The table shows that the average per capita income of all developing economies and former communist countries was only $1,160 in 2001($460 and $890 for India and China, respectively) as compared with $26,710 in high-income developed economies. • ￥$

31. Case Study. Manufactures in Total Exports of Selected Developing CountriesTable.Manufactures as Percent of Total Merchandise Exports, Selected Developing Countries,1983 and 2000

32. The Foreign Debt Problem of Developing Countries发展中国家的外债问题 • During the 1970s and early 1980s,developing countries accumulated a total foreign debt exceeding $1 trillion, which they subsequently found very difficult to service (i.e.,repay the principal or even pay the interest on). • This difficulty seriously hampered their development plans during the 1980s.The debt arose as many developing countries borrowed heavily from private banks in developed nations to finance their growing capital needs and to pay for sharply higher oil bills during the 1970s—all this in the face of slowly expanding exports to developed countries (as the latter entered a period of slow growth), lower prices for their commodity exports, and higher interest rates.

33. Trade Problems of Developing Countries发展中国家的贸易问题 • During the 1980s,developed countries, beset by slow growth and large unemployment, increased the trade protection they provided to some of their large industries (such as textiles, steel, shipbuilding, consumer electronic products, television sets, shoes, and many other products )against imports from developing countries. • These were the very industries in which developing countries had gained or were gaining a comparative advantage. A great deal of the new protectionism was directed especially against the manufactured exports of the High-Performance Asian Economies (HPAES), then called newly industrialized economies (NIEs).