Multinational Enterprises And The Trade Blocs Essay

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One of the most important influence on the strategies of multinational enterprises or corporations are the trade blocs. Trade blocs determines the scope of regional markets and the regulations by which firms must operate. This is where the term Economic integration, which represents an agreement between nations within and geographic region (International Business), arises. Economic integration comes with three approaches: global integration -countries around the world cooperate through the WTO -, bilateral integration – two countries cooperate closely- , and regional integration – group of countries located in the same geographical proximity decided to cooperate- .
The WTO was created in order to regulate the GATT. The GATT was a multilateral agreement whose objective was to liberalize world trade. The main principle of trade was fixed in the MFN clause –each member must open its markets equally to every other member nation-. The two main purposes of the WTO is to ease the development of a free and international trade and the settlement of trade disputes between its member nations. Then, the WTO adopted the principles and agreement reached in the GATT, but with a greater scope which according to the textbook include trade in services, investment, intellectual property, sanitary measures, agriculture, textiles, technical barriers to trade and so on.
Regional economic integration deals with the Regional Trade Agreements (RTA’s) which involve a group of countries that due to
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