Martin Textile

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closing Case Martin's Textiles August 12, 1992, was a really bad day for John Martin. That was the day Canada, Mexico, and the United States announced an agreement in principle to form the North American Free Trade Agreement. Under the plan, all tariffs between the three countries would be eliminated within the next 10 to 15 years, with most being cut in 5 years. What disturbed John most was the plan's provision that all tariffs on trade of textiles among the three countries were to be removed within 10 years. Under the proposed agreement, Mexico and Canada would also be allowed to ship a specific amount of clothing and textiles made from foreign materials to the United States each year, and this quota would rise slightly over the first…show more content…
A political union is the logical culmination of attempts to achieve ever-closer economic integration. 3. Regional economic integration is an attempt to achieve economic gains from the free flow of trade and investment between neighboring countries. 4. Integration is not easily achieved or sustained. Although integration brings benefits to the majority, it is never without costs for the minority. Furthermore, concerns over national sovereignty often slow or stop integration attempts. 5. Regional integration will not increase economic welfare if the trade creation effects in the free trade area are outweighed by the trade diversion effects. 6. The Single European Act sought to create a true single market by abolishing administrative barriers to the free flow of trade and investment between EU countries. 7. The Maastricht Treaty aims to take the EU even further along the road to economic union by establishing a common currency. The economic gains from a common currency come from reduced exchange costs, reduced risk associated with currency fluctuations, and increased price competition within the EU. 8. Although no other attempt at regional economic integration comes close to the EU in terms of potential economic and political significance, various other attempts are being made in the world. The most notable include NAFTA in North America, the Andean Pact and MERCOSUR in Latin America, ASEAN in

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