Regional Integration Ã¯Â¿Â½ PAGE \* MERGEFORMAT Ã¯Â¿Â½5Ã¯Â¿Â½
Running head: REGIONAL INTEGRATION
Tiffany Nicole Jackson
University of Phoenix
Global Business Strategies
13 September 2007
According to the textbook, International Business: Competing in the Global Marketplace, regional economic integration refers to agreements among countries in a geographic region to reduce, and ultimately remove, tariff and non tariff barriers to the free flow of goods, services, and factors of production between each other. For the purpose of this paper I will analyze the role of regional integration in promoting global business.
In today's world with advanced technology, communications, and the internet, business is conducted on a global scale every day. The world is one big marketplace. Regional economic integration allows countries, in certain regions, to conduct business with each other openly and freely without restrictions.
According the American Marketing Association, the comparative advantage theory, in global marketing, is a theory that holds that a country can gain from trade even if it has an absolute disadvantage in the production of all goods, or, that it can gain from trade even if it has an absolute advantage in the production of all goods.
This theory can be used to support regional economic integration because it allows a country to trade in goods or services that they normally don't produce and to focus on goods and services they do produce. The production capabilities of each country vary because they have different levels of education, workforce, natural resources, capital, etc. Regional Trade Agreements (RTA) also helps these countries with their productions capabilities without the trade restrictions.
The comparative advantage theory shows the advantage of regional economic integration. Without the trade restrictions, because of Regional Trade Agreements, the normal trade barriers aren't there and countries can increase...