The Pros And Cons Of Economic Integration In Africa

The first RTA I chose to discuss is a Non-Reciprocal Trade Arrangement called Africa Growth and Opportunity Act (AGOA). USTR.gov states, “In 2013, U.S. goods imports from sub-Saharan African under AGOA and the related GSP program totaled $26.8 billion, more than three times the amount in 2001, the first full-year of AGOA trade.” There are challenges for this agreement as the site later states, “Exports of U.S. poultry have been effectively excluded from the South African market for 15 years due to a range of trade barriers and other measures.” This agreement has potential to assist the African economy in numerous ways as the exports can create large revenue for Africa and can also provide employment opportunities. The difficulty lies with changing trade barriers that could begin to cause more products and materials to have higher taxes associated.

Countries would participate in foreign direct investments because it helps in the economic development of the country where the investment is being made. They also engage in FDI to reduce production costs.

Yet for these countries, world trade in reality plays a major role. In many Sub-Saharan countries, foreign trade (measured in terms of imports and exports) represents more than fifty percent of their GDPs. This is due to a lack of infrastructure and machinery to process the available raw materials which leaves countries overdependent on imports, not adequately balanced by corresponding exports. This dependence on finished imports would be curtailed if these nations had enough capital to purchase machinery to process their raw-materials and sell the finished product locally or export them. However, in order to obtain enough capital to fulfill such drastic projects, they need outside help in the form of private investors.

In theory, the liberalization of FDI not only should benefit foreign investors, but also should help domestic economies share in the wealth derived from foreign investment. FDI, as a means of generating domestic revenue, may also serve as an effective means by which to redeploy those revenues into a nation's economic, social, and political infrastructures. "^^ Insofar as states restrict FDI in protectecl sectors, they may encourage it in less protected sectors.

Regional economic integration represents agreements between countries in a geographic region to reduce tariff and non-tariff barriers to the free flow of goods, services and factors of production between each other. Neighboring countries tend to ally because of their proximity to one another, somewhat similar regional tastes, the relative ease of establishing channels of distribution and a willingness to cooperate with one another for the greater benefit of all allied parties. Theoretically, the concept of regional economic

In today's globalized economies, virtually every country in the world belongs to some form of regional integrated trade organization whether by direct membership, bilateral or multilateral agreement. Regional integration is a process by which sovereign states in a particular region enter into an agreement to promote economic growth through the reduction of barriers to trade restrictions and safeguard common interests such as the environment. The removal of trade barriers results in a free trade zone thus creating a single market. Sovereign nations have many differences, some may be more economically sound and others may have a greater labor force or better technology. In the end,

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.

FDI allows the home country to invest into the host country to produce, advertise, and distribute products, in order to upsurge their market share and provides a long-term investment and enhancement. (Moosa, 2002)

Trade agreements facilitate the free exchange of goods and services between nation-states, and contribute to varying degrees to complete economic integration between two or more states. Autarky refers to a non-trading status, a phenomenon rarely seen in today’s increasingly integrated globe. The steps taken to fully integrate are referred to as stages, a categorization that makes evident the variability in degree of integration. At the first stage, a preferential trade area can be set up as a less formal means of encouraging trade by enacting preferential tariffs to target specific countries’ exports (usually developing countries), in addition to other unilateral trade benefits. Free trade areas are the next step up along the full

To be more precise the investments from eh developed countries with their investment in the emerging of developing countries are from the big Trans national corporations that have stronger foothold in world capital markets. Thus any kind of investment either through opening of wholly foreign investment venture or joint ventures with domestic companies of the developing nations help in greater valuation of the companies world stock market increasing overall capitalization.

Preferential Trade Area (PTA) is when countries in the same geographical region agree to eliminate or reduce tariff barriers on certain goods. Similar to PTA, the Free Trade area is when two or more countries agree to eliminate or reduce barriers to trade and freely import and export goods between each other. Members of a trade bloc who remove trade barriers internally, while imposing a uniform tariff on non-member countries is an example of a Customs Union. Members of a Customs Union will come together and negotiate tariff regulations with countries outside their bloc. One of the most comprehensive trade blocs is the Common Market. A Common Market is a major step towards economic integration. In a Common Market, bloc member countries are able to trade all economic resources without restraint. While other types of trade blocs primarily free up the trading of goods and services, the Common Market frees the flow of capital and labor between member nations. Also in the Common Market bloc tariffs and non-tariff barriers are removed, increasing free trade activity. Nations that belong to a Common Market must have

This study has indicated that there are some differences as to what determines the direction of bilateral trade flows across countries or regional economic blocs. The motives behind the formation of such arrangements disparate from region to region hence, there are differing arguments that explain the rationale for their set up. Developing countries’ regional blocs in general, African ones in particular, are often criticized for being politically oriented and this view has been partially supported by the study.

In the past few decades, the popularity of investment treaties outlining the protection and promotion of foreign investors in developing countries has grown exponentially, particularly with Bilateral Investment Treaties, or BITs. Historically, these treaties have been between developed countries of the Global North and developing countries of the Global South with the belief that foreign investment contributes to economic growth and development in developing countries. The positive economic effect of BITs on development has sparked research into how economic liberalization affects development. The most pertinent literature regarding investment treaties and development is divided into four categories: (1) the impact of BITs on Foreign

How do you define the concepts of economic integration? As you already studied that the level of its integration can vary from loose association to almost complete ones. Discuss these different levels of economic integration with examples for each of the stages.

Through FDI, the host countries will know efficient management technique. The best example is Basel II. Most of the banks are opting Basel II for making their financial system more safer.