IntroductionThe following paper reviews the role of regional integration regarding global businesses, the advantages and disadvantages of global business and the role of APEC (Asia-Pacific Economic Cooperation), compare and contrast of the economic development stages of other countries within APEC and the ramifications to economic development.
Regional IntegrationC.W.L. Hill (2005) describes regional economic integration as "agreements among countries in a geographic region to reduce, and ultimately remove, tariff and nontariff barriers to the free flow of goods, services, and factors of production between each other" (Hill, 2005, p. 268). Globalization allows businesses and consumers around the world to produce, distribute and purchase products which are grown, processed, and distributed by the efforts of multiple countries across the globe (Hill, 2005). Globalization efforts have brought the development of organizations such as NAFTA, EU, APEC, ASEAN, CAFTA and others to address globalization among specific member countries within each organization. Globalization has introduced or improved employment in developing countries and reduced the cost of goods sold in developed countries such as the United States, increasing profit margins for corporations and stockholders (Hill, 2005).
Advantages and Disadvantages of Regional IntegrationAdvantages for regional integration with free and open trade allow countries to manufacture or produce mass quantities of goods specific to those countries, such as chocolate, coffee, dairy, and electronics for export while stimulating growth in those economies. Greater production at lesser expense allows importing countries greater savings which allow the sale of a final product or service at a lower cost to consumers. Regional integration establishes a larger market, increasing the demand for trade and increased competition. Increased competition reduces the chances of a business dominating the market which keeps product prices from rising extravagantly (Hill, 2005).
Disadvantages of regional integration is that the cost of business varies from country to country,