Writing/Thinking International Buissnes law
farhm9
Ch15Ppt1.pptxCHAPTER 15 The European Union and Other Regional Trade Areas
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Philosophy of Economic Integration
Federal Model.
Free Trade Area: two or more countries agree to eliminate or phase out customs duties and barriers to trade among the member countries.
Customs Union: there is free trade in all goods that come through union members.
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Philosophy of Economic Integration
Common Market: common rules & currency.
Compatibility of Free Trade Areas with the WTO and GATT.
How can members of an FTA treat its members more favorably than other GATT/WTO members? Isn’t this practice discriminatory, and a violation of GATT?
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European Union
History.
Treaty of Rome (1957) creates European Community.
Single European Act (1987) set 1992 deadline of achieving single market.
Maastricht Treaty (1993) created European Union and set path for monetary union.
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European Union
History (cont’d).
Treaty of Lisbon (2009). Significantly restructured the European Union.
Structure of the European Union.
Council of Ministers of the EU sits in Brussels, Belgium, the “capital” of the EU.
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European Union
Structure of the EU (cont’d).
The European Commission of the EU is the executive body carrying out the decisions of the council.
The Court of Justice of the EU in Luxembourg is the final arbiter of EU law.
The European Parliament, elected by European citizens.
Distinctions Among Institutions.
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European Union
Harmonization: Directives and Regulations.
Treaty of Rome identifies four principal means to harmonize laws:
A regulation shall have general application.
A directive shall be binding as to the result to be achieved.
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European Union
Harmonization: Directives and Regulations (cont’d).
Treaty of Rome identifies four principal means to harmonize laws:
A decision shall be binding upon those to whom addressed.
Recommendations and opinions have no binding force.
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The European Union and the Regulation of Business: The Four Freedoms
Refers to a body of law originating in the Treaty of Rome:
Free Movement of Goods,
Free Movement of Services,
Free Movement of Capital,
Free Movement of People.
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The European Union and the Regulation of Business: The Four Freedoms
Free Movement of Goods.
Prohibits customs duties and taxes on imports and exports; also quantitative restrictions or other non-tariff barriers.
See the Commission of the European Communities v. Italian Republic (2003) case. Italy’s restriction on chocolate products containing vegetable fat to be labeled “chocolate substitutes” was struck down.
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The European Union and the Regulation of Business: The Four Freedoms
Free Movement of Services.
Treaty of Rome prohibits restrictions on services from a national in one state to a national in another.
Free Movement of Capital.
Efforts to integrate free flow of capital include the European Central Bank and the “Euro.”
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The European Union and the Regulation of Business: The Four Freedoms
Free Movement of Capital (cont’d).
See the Commission of the European Communities v. Italian Republic (2006) case. Italy’s restrictions on debt recovery within the member state violated EU policy.
Free Movement of People.
All EU residents have complete freedom to travel, work, study, and live in another member state.
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Other Areas of Integration
The Common Agricultural Policy.
What is it, and what conflicts have occurred?
How are the goals described now? “transparency, quality and safety and a farm sector in tune with the environment and animal welfare. A sustainable farm and food sector for the future.”
How does the expansion of the EU affect this?
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Other Areas of Integration
Consumer Protection.
Safety standards, fair business practices, misleading advertising on most products, drugs, and appliances.
Energy and the Environment.
The Information Society.
Reduce regulatory burden on providers, increase consumer access, and competition.
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Other Areas of Integration
Business Implications of the EU.
What are the ramification for business of the expansion of the EU?
What impact does the trade friction between the U.S. and the EU have on business ventures?
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Other Regional Trade Areas
Western Hemisphere Free Trade Initiatives.
Mercosur: Argentina, Brazil, Paraguay, Uruguay.
CAFTA-DR: Central America.
Andean Common Market: Bolivia, Colombia, Ecuador, Peru.
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CARICOM: Caribbean Community.
African Free Trade Initiatives.
African Economic Community.
COMESA: Common Market for Eastern and Southern Africa.
Southern Africa Development Community.
The Africa Free Trade Zone.
Other Regional Trade Areas
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Asian Free Trade Initiatives.
Asia-Pacific Economic Cooperation Group.
ASEAN: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei, Myanmar, Laos, Cambodia, Vietnam.
Other Regional Trade Areas
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Other Regional Trade Areas
Other Free Trade Initiatives.
Commonwealth of Independent States Free Trade Area.
Gulf Cooperation Council.
Greater Arab Free Trade Area.
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Conclusion
The EU and NAFTA have stimulated many regional agreements and free trade areas that are increasing trade and economic development.
Free trade is the ‘wave of the future.’
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