Globalization has brought remarkable benefits to the world, and an even greater reliance on others for products and services. This calls for closer international cooperation to ensure that regional integration is ever more inclusive and works for the benefit of all. Regional economic integration is motivated by a desire to exploit the gains from free trade and investment. This paper will analyze the role of regional integration in promoting global business, discuss the advantages and disadvantages of the Asia-Pacific Economic Cooperation (APEC), compare and contrast the economic development stages of countries within APEC and ramifications of APEC economic development for global business.
Regional integration is an agreement between counties within a specific region to reduce tariff and non-tariff barriers. Eliminating these barriers will promote the flow of goods, services and production between them. Regional integration promotes global business by building a relationship between counties within a specific region to develop economic and social strategies and trade policies.
The capacity to accelerate and strengthen economic, social and cultural ties between counties is what makes regional integration so important. These agreements are designed for all member counties to encourage free trade within their region (Hill, 2004).
There are many advantages and disadvantages in regional integration. An advantage is the ability to establish free and open trade. Free trade helps economic growth, produces jobs and offers further opportunities for trade and investment. Free trade lowers the costs of production thereby reducing he price of goods and services. Regional integration also forms larger markets allowing economies of scale, increased competition and foreign investment. Integration also accelerates the opening of economies worldwide, improves the integrity of nation reform, supports unity for international talks, and reduces and/or resolves inter-state disagreements (Hill, 2004).
Along with advantages come disadvantages. A disadvantage is the costs associated with regional...