International Business and the Regions Essay

Download this Essay in word format (.doc)

Note: Sample below may appear distorted but all corresponding word document files contain proper formatting

Excerpt from Essay:

International Business and the Regions

In the era of globalization, the primary scope of agencies, institutions and players across the world seems the creation of a free international market place. The efforts so far made have however been insufficient to create such a market place, but impressive successes were observed in terms of the creation of regional market places. In other words, the modern day economic society has managed to support and concretize its efforts in the direction of regional economic development.

Regional economic integration

Regional economic development is virtually understood as a context in which countries in the same global region direct their endeavors in the sense of creating an economically integrated region. They virtually focus on free trade and migration of goods, people, commodities, technologies and capitals and they strive to reduce the barriers between the respective economies. Jacques Pelkmans (2006) defines economic integration as "the elimination of economic frontiers between two or more economies. In turn, an economic frontier is any demarcation over which actual and potential mobilities of goods, services and production factors, as well as communication flows, are relatively low. On both sides of an economic frontier, the determination of prices and quality of goods, services and factors is influenced only marginally by the flows over the frontier."

The primary benefits of regional economic integration refer to the stimulation of trade operations between the countries in the agreement, the creation of greater consensus, the support of enhanced political cooperation and an increased international competition (Xing). In terms of the actual means in which regional economic integration can be created, these refer to the following:

The creation of an economic union through the harmonization of economic principles

The creation of the common market through factor mobility

The creation of custom unions through common external trade policies, or The creation of free trade areas through the signing of free trade agreements between regional states (Czinkota and Ronkainen, 2007).

4. Regional economic integration in North America

The years since 1990 have been marked by intense efforts of regional economic integration, the most representative ones being obvious within North America, where the economic agents and the governments both cooperated in the creation of free trade agreements. The most important of these agreements is the NAFTA -- North American Free Trade Agreement, signed in1994 by the United States, Canada and Mexico. The agreement has been assessed with both praises as well as criticism, to hereby constitute a major part in the analysis.

The first step in appraising the regional economic integration between the United States, Canada and Mexico is that of looking at the trade and investments in the region in order to identify the levels and types of integration.

a) Trade

Immediately after the NAFTA was signed, the three countries commenced to eliminate their barriers. In 1994 for instance, Mexico eliminated 50 per cent of its barriers, to eventually come in 2003 to eliminate all of them. In terms of trade, the agreement generated the following outcomes:

Total trade in goods between the three states has increased from $297 billion in 1993 to $883 billion in 2006, revealing a 198 per cent increase

The exports of United States products into Canada and Mexico increased from $142 billion in 1993 to $364 billion in 2006 -- a 157 per cent increase

The imports Canadian and Mexican products into the United States increased from $151 billion in 1993 to $500.7 billion in 2006 -- a 125 per cent increase

The export of services from the United States to Canada and Mexico increased by 289 per cent (Export Gov, 2011).

b) Investments

At the level of investments, these are also consistent with the increases in trade as well as consistent with the regional efforts towards economic integration. Specifically, the investments of the United States into Canada and Mexico have increased by 189 per cent. The investments accumulated $61.7 billion in 1993 and had reached $331.2 billion in 2006. Canadian and Mexican direct investments in the United States cumulated $166.1 billion.

These increases in investments are pegged to the existence of regulations and policies which protect investments and ensure correctness and transparency.

"With limited exceptions, NAFTA requires U.S. investors to be treated in Mexico and Canada as well as those countries treat their own investors or investors of any other country in the establishment, acquisition, and operation of…[continue]

Cite This Essay:

"International Business And The Regions" (2011, May 27) Retrieved December 3, 2016, from http://www.paperdue.com/essay/international-business-and-the-regions-45046

"International Business And The Regions" 27 May 2011. Web.3 December. 2016. <http://www.paperdue.com/essay/international-business-and-the-regions-45046>

"International Business And The Regions", 27 May 2011, Accessed.3 December. 2016, http://www.paperdue.com/essay/international-business-and-the-regions-45046

Other Documents Pertaining To This Topic

  • International Business and the Regions

    International Business and the Regions How far has the competitiveness of two East Asian firms been based on: (1) national networks and institutions, including localised clusters; (2) regional links and networking across the East Asian region; (3) transnational links beyond the East Asian region and; (4) support from the policies of one or more East Asian governments? Over the last several decades, globalization has been having a tremendous impact on the way

  • International Business Environment My Firm s Acquisition You

    International Business Environment My Firm's Acquisition You write a (4-8) page report answers: • As a CEO, acquire a foreign firm. The size firm double, largest industry. What firm foreign firm acquire ? Where firms based? •You enthusiastic opportunity a leading captain industry power, prestige, income. Greys Technological Company Acquisition Grey Technological Company (GTC) is a corporation with interests in Information Technology and Telecommunications (IT&T) and Business Process Outsourcing (BPO) located in the

  • International Business Environment Outline and Critically Discuss

    International Business Environment Outline and critically discuss the criteria by which they judge whether or not a country is stable. International businesses faces a number of risks when they decide to operate overseas. Their ability to make sound investment decisions and to address those risks is directly related to the stability of the country in question. Firms therefore need to develop mechanisms for measuring stability before making the decision to enter a

  • International Business Over the Last Several Decades

    International Business Over the last several decades, globalization has been having profound impact on the way businesses are operating. This has created shifts in the markets for a wide variety of corporations seeking to aggressively expand into these areas to increase their overall profits. A good example of this can be seen with a study that was conducted by the UN Conference on Trade and Development. They found that nearly 90%

  • International Business Dealings Communication Is

    In the U.S., the concept of a dead line is standard; in societies of the Middle East this is not even a concept to recon with. Time is also a strategy that is used by different cultures to signify different conditions. In Latin America, waiting for an appointment with a senior is normal and not to be considered an insult. In the U.S., the amount of time spent waiting

  • International Business Nike Corporation International Business Nike...

    International Business: Nike Corporation International business Nike Corporation The purpose of this work is to research Nike Corporation in relation to international business through the conduction of a SWOT analysis of the company, as well as analyzing the industry. Further this paper will examine the top competitors of Nike Corporation as well as the international factors and elements which affect the corporation either positively or negatively. Nike Corporation states on the Nike.com website that

  • International Business Competitive Strategy Is the Bedrock

    International Business Competitive strategy is the bedrock on which companies base business decisions to reach their targets and achieve profitability. Formulating and implementing strategies in international business is much more complicated and difficult task than doing so in home or familiar markets. Competitive strategy deals with the development of abilities by a firm to keep ahead of competitors in the fields in which it operates. Firms develop competitive edge in global


Read Full Essay
Copyright 2016 . All Rights Reserved