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International and supranational institutionalized integration

International and supranational institutionalized integration. Dr. Truong Thi Kim Chuyen. Economic change and the new geopolitics International and supranational institutionalized integration The logic of integration Types and levels of integration

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International and supranational institutionalized integration

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  1. International and supranational institutionalized integration Dr. Truong Thi Kim Chuyen

  2. Economic change and the new geopolitics • International and supranational institutionalized integration • The logic of integration • Types and levels of integration • The GATT (General Agreement on Tarriffs and Trade) framework and the WTO • Institutional forms of supranational integration

  3. Spatial outcomes of economic integration • The imprint of the european union • Trade creation and diversion • Spatial polarization • Effects of the common agricultural policy • Regional policy • External effects of the EU

  4. Economic change and the new geopolitics • Although private companies are by no means absolute masters of their own fate, they do have the ability (as compared with governmental units) to redefine their commitments and objectives in response to the changing opportunities presented by the globalization of the world economy. • What has happened is that the logic of the world economy has in many ways transcended the scale of nation – state. • It was the international trade system that provided the major impetus for countries to be draw into various forms of institutionalized integration.

  5. The particular advantages of formalized international and supranational integration include: Potential for economies of scale, particularly for the smallest countries and the weakest national economies. Potential for creating multiplier effects from the existence of enlarged markets. Potential for strengthening regional interaction by easing the movement of labor, goods and capital.

  6. The particular disadvantages of formalized international and supranational integration include: Potential loss of national sovereignty over a broad spectrum of issues. Potential for the intensification of internal inequalities as a wider geographical context make for more pronounced process of uneven development.

  7. TYPES AND LEVELS OF INTEGRATION Formal Informal International Supranational Economically Strategic Political Sociocultural Mixed

  8. INSTITUTIONAL FORMS OF SURRANATIONAL INTEGRATION Free trade association: member counties eliminate tariff and quota barriers to trade from other member states, but each individual member countries to charge its regular duties on materials and products coming from outside the association. Customs union: also involves the elimination of tariffs between member states, hut has a common protective wall against non-members. Common market: internal restrictions on the movement of capital, goods, labor and enterprise are removed.

  9. Supranational political union: a single monetary system and a central bank, a unified fiscal system, a common foreign economic policy and a supranational authority with executive, judicial and legislative branches. Trade preference associations

  10. SPATIAL OUTCOMES OF ECONOMIC INTEGRATION Trade creation effects Trade diversion: will have taken place, with the result that consumption is shifted away from lower cost external sources to higher cost internal sources, consumers have to pay more for certain goods and levels of living may be depressed.

  11. It is relatively easy for core states to meet the political, social and cultural prerequisites for successful economic integration. These include: Similarity in the power of units joining the association Complementarity of elite value systems Existence of pluralistic power structures in member countries Positive perceptions concerning (a) the expected equity of the distribution of benefits from integration and (b) the magnitude of the costs of integration Compatibility of states’ decision-making styles Adaptability, administrative capacity and flexibility of member states’ governments and bureaucracies.

  12. SUMMARY • In the practice, the basic principles of economic geography has resultes in three main outcomes: • Reinforcement of the dominant core-periphery structure of the world economy. • Spatial reorganization of production as trade creation and trade diversion affect both member and non-member states. • Creation and intensification of regional polarization as the economies of scale and multipier effects in regions most favoured by integration create backwash effects elsewhere.

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