Case Study

 Economic interdependence means lesser escalation of political conflicts.     Impediments to Integration   Inefficient industries lose out (e..g US steels, and textiles) however, if a country  protects these inefficient industries, this in turn will make other industries become less  internationally competitive, due to the high cost of imports.    Governments are forced to compromise some degree of national sovereignty.    National interests may not equal regional instruments    Political/industrial interest groups (need to be overcome).    Third largest population of 500 million (after China and India), 340 million high income  consumers.    World largest economy in terms of GDP    Reasons for formation of this union:   o Avoid future political conflict   o Gain size, scope and efficiency advantages that allow European nation state to  compete with the US and Japan.

Free trade provides opportunity, it provides growth, and it provides struggling nations a chance. With free trade, markets open across national borders and the consumer ultimately benefits from higher quality goods at fair market prices. The producers of such goods now have larger markets to sell to allowing for the opportunity at increased sales, giving the consumer a greater variety of goods that can more individually meet specific demands. Free trade implementation to the United States foreign policy is a developing and revolutionary mindset that will bring prosperity to all parties involved. The United States will benefit from free trade because the market to purchase U.S. made goods and services will increase dramatically

The EU and the trade agreements entered into by member countries are examples of economic integration and cooperation. The benefits of joining an economic or trading bloc and reducing trade barriers can be plenty and they encourage countries to join them, and can be gained by all of the countries who are part in the economic integration agreement.

Since the mid-20th century, countries have progressively reduced barriers, subsidies to domestic industries and diverse restrictions on international commerce in order to promote specialization and greater efficiency in production. In theory, free trade allows nations to focus on their main comparative advantages and profit from cooperation and voluntary trade. This strategy is usually reinforced by treaties between two or more countries where commerce of goods and services can be handled across their common borders, without tariffs and other trade obstacles. As a key component of regional integration in the Americas, CAFTA-DR is one important example of this economic ideology.

     International trade has been in existence throughout history and has an economic impact on the participating countries. Trade in most countries has a share of the Gross Domestic Product (GDP) and helps to boost the

In order to establish a free trade area, each country must agree on the rules in which each country must follow while operating in the trade of their products. In addition, each country must agree on the custom procedures that must be adhered to by each member of the

Zooming in on the Economic Developments in the European UnionIn the globalizing world, it is but logical that most trade groups contain countries in the same area of the world to offer trade agreements to obtain mutual benefits. Neighboring countries tend to ally for several reasons:•The distances that goods need to travel between such countries is short.

The United States has free trade agreements with 20 countries. These include 12 bilateral agreements and 2 multilateral agreements. (United States Government, 2015)These agreements create opportunities to increase U.S. agricultural sales internationally, stripping away barriers to trade, eliminating tariffs, opening markets and promoting investment and economic growth. (United States Government, 2015)

Many economists today argue that the fewer tariffs and barriers there are to foreign trade, the better everyone fares. That view underlies the agreements that the United States and 152 other countries have made as members of the World Trade Organization (WTO). Among other

As intended in the Global Europe strategy, the EU attempted to widen its trade market to East Asian economies. South Korea was the first for the EU to start that aim. Generally, tariffs on over ninety percent of goods are expected to be removed within 3 years and a total elimination of tariffs within 7 years for South Korea and within 5 years for the EU (Hwang and Kim, 2014). According to an econometric estimation, the most beneficial sector from the FTA should be the service sector, which could be liberalised up to seventy percent of the total (Copenhagen Economics and Francois, 2006). The level of the developments of agricultural trades between the two sectors was stationary as there is a large gap of surplus; the EU exported 1.39

The ultimate objectives of AFTA are to increase ASEAN's competitive edge as a production base geared for the world market and to liberalize trade in goods in the ASEAN region through the elimination of intra-regional trade barriers on both tariff and non-tariff barriers for ASEAN products. The elimination of trade barriers among Member States is expected to promote greater economic efficiency, productivity and competitiveness, which should create a larger market in the Southeast Asian region. Thus, investors will benefit from economies of scales productions, and moreover, consumers in ASEAN Member States will enjoy lower-priced products. ASEAN expects that AFTA will attract more foreign investment into the ASEAN region, and this investment will stimulate the growth of supporting industries. The Agreement on the Common Effective Preferential Tariff (CEPT) Scheme for the ASEAN Free Trade Area is the main implementing mechanism by which the ASEAN Free Trade Area seeks to eliminate intra-regional tariffs and non-tariff barriers.

Many of the states were early signatories to BITs, agreements prepared by capital exporting states. In the early 1980s, the Asian-African Legal Consultative Organization (AALCO) which was formed in 1956, published three draft BITs, which provided different models of investment liberalization and protection.(41) In 1980, the United treaties Agreement for the Investment of Arab Capital was signed in the Arab States creating an Arab Investment Court and its first decision was given in the case of Tanmiah v. Tunisia, 12 October 2004. In addition, the European Economic Community (EEC) and some African, Caribbean and Pacific (ACP) states concluded the Lom? III and Lom? IV Conventions, both of which had sections addressing investment.(42) In 2007, the Common Market for Eastern and Southern Africa (COMESA) embraced an Investment Agreement for the COMESA Common Investment Area. (43) In 1987, the Association of South East Asian Nations (ASEAN) created the Agreement for the Promotion and Protection of Investments (ASEAN Investment Agreement) applicable to ASEAN investors. The ASEAN Investment Agreement was considered in Yaung Chi Oo Trading Pte. Ltd. v. Myanmar. The ASEAN Investment Agreement was amended by the Jakarta Protocol in 1996. In 1998, the Framework Agreement on the ASEAN Investment Area (Framework Agreement) was concluded.

In the second place, we have open regionalism, in which groups of countries agree to reduce restrictions on trade both between themselves and with other countries, that is, external liberalization by trade blocs, although the degree of liberalization on imports from non-member countries doesn’t need to be as high as that for member countries. Within this approach, we can find the APEC (Asia-Pacific Economic Cooperation) that encompasses most of the East Asian

Moreover it is important to note that inasmuch as these countries have expanded access, there are also standardized business regulations that prevent countries from dumping products at a cheap cost, stealing innovative products or using unfair subsidies. By engaging in this trade agreement, benefits such as elimination of tariffs or

While going through different studies some of them have find mixed and inclusive result like (Abrams, 1980 and Frankel et al, 1995), Most of the recent studies found that FTAs/PTAs has raised the trade volume between associated countries.( Baier & Bergstrand, 2007). However, the increase in trade volume is not similar in developed and developing countries. The less developed countries are un-natural trading partners because of their similar comparative advantage, same endowments, limited economic sizes and higher trade costs (Krugman, 1991 and Magee, 2003). Southern countries can play better role in North-South agreements than agreements among themselves, because of having