Multinational Market

1
Multinational Market Regions and Market Groups
2
Multinational MarketRegions and Market Groups

• I. Patterns of Multinational Cooperation
• 1) Regional Cooperation Groups
• 2) Free Trade Area
• 3) Customs Union
• 4) Common Market
• 5) Political Union

3
The European Economic Area EU, EFTA, and
Associates
ICELAND
EU
EFTA
NORWAY
SWEDEN
EC Associated
FINLAND
ATLANTIC OCEAN
Netherlands
DENMARK
UNITED KINGDOM
IRELAND
GERMANY
BELGIUM
Austria
FRANCE
Switz.
ITALY
Portugal
SPAIN
TURKEY
MALTA
GREECE
4

• II. Europe
• 1) European Union
• a) Implications for European Firms
• - Lower transaction/transport costs
• - Economies of Scale in production
• - Gains from competition
• b) Free Expansion to Other European
• Markets
• - Access to gt 370 million consumers
• - Flexible production
• - Harmonization of laws/standards

5
A Comparison of the EU and NAFTA
Population GNP Imports
Exports ( millions) (per capita) (
millions) ( millions)
10-7
EU 373.5
8,180 1,899,466
1,927,914 NAFTA 387.4
8,061 1,014,211
852,536
Includes 15 Countries. Includes intra-member
trade.
SOURCES Indicators of Market Size for 115
Countries, Crossborder Monitor, August 27, 1997
and International Marketing Data and Statistics,
1997 (London Euromonitor, 1997).
Irwin/McGraw-Hill
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• c) European Union Implications for U.S. Firms
• - Easier access to European markets
• - Potential growth in demand for U.S. products
• - Increased competition
• - Fears of Fortress Europe
• Marketing Mix Implications of EU
• 2) EFTA
• 3) CEFTA

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EC Institutions
European Commission
Council of Ministries
European Parliament
European Court of Justice
8
Commonwealth of Independent States
ARCTIC OCEAN
BELARUS
MOLDOVA
10-10
UKRAINE
RUSSIAN REPUBLIC
GEORGIA
ARMENIA
AZERBAIJAN
KAZAKHSTAN
UZBEKISTAN
TURKMENISTAN
KYRGYZSTAN
TAJIKISTAN
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Central European Free-Trade Area (CEFTA)
? Poland ? Hungary ? Slovakia ? Czech
Republic ? Slovenia ? Romania
10-11
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North American Free-Trade Area (NAFTA)
Canada
10-12
United States
Mexico
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North American Free-Trade Area Provisions
? Market Access ? Non Tariff
Barriers ? Rules of Origin ? Customs
Administration ? Investment ?
Services ? Intellectual Property ?
Standards ? Government Procurement
10-13
Irwin/McGraw-Hill
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NAFTA Rules of Origin
Rule Type Description
Tariff shift rule Non-NAFTA imports
undergo sufficient manufacture or
processing to become products that can
qualify under a different tariff
classification. Value-content rule A
set percentage of the value of the good must
be North American (usually coupled with a
tariff classification shift requirement).
Some goods are subject to the
value-content rule only when they fail
to pass the tariff classification test
because of non-NAFTA inputs.
10-14
A complete description of the rules of origin
can be found at www.mac.doc.gov/nafta/menu1.htm
(select NAFTA Rules of Origin and Customs
Information).
Irwin/McGraw-Hill
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Southern Cone Free Trade Area (Mercosur)
? Argentina ? Bolivia ? Brazil
? Chile ? Paraguay ? Uruguay
10-15
Irwin/McGraw-Hill
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Latin American Integration Association (LAIA)
? Argentina ? Mexico ? Bolivia ?
Paraguay ? Brazil ? Peru ? Chile ?
Uruguay ? Columbia ? Venezuela ? Ecuador
10-16
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Andean Common Market (ANCOM)
Bolivia
Columbia
10-17
Ecuador
Peru
Venezuela
Panama (Assoc.)
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Caribbean Community and Common Market (CARICOM)
? Antigua ? Montserrat ? Barbuda ? St.
Kitts-Nevis ? Belize ? Anguilla ? Dominica
? St. Lucia ? Grenada ? St. Vincent ?
Guyana ? Trinidad-Tobago ? Jamaica
10-18
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Central America Common Market (CACM)
Guatemala
10-19
Costa Rica
Nicaragua
Honduras
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The Future
NAFTA SAFTA ??? FTAA ???
10-20
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Association of Southeast Asian Nations (ASEAN)
? Brunei ? Philippines ? Indonesia
? Singapore ? Laos ? Thailand ?
Malaysia ? Vietnam ? Myanmar
10-21
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ASEAN 3

• Brunei Singapore
• Indonesia Thailand
• Laos Vietnam
• Malaysia ? China
• Myanmar ? Japan
• Philippines ? South Korea

10-22
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Comparison of Exports Among Members of APEC and
the EC
Population, 1989 Exports, 1990 Exports,
1995 GNP, 1996 (millions) (U.S.
millions) (U.S. millions) (U.S. billions)
APEC 2,235 732,869 770,097 22,952Americas 406 30
6,486 311,085 7,989Asia 1812 399,455 419,901 6,44
7Oceania 22 26,928 34,111 343 EC 374 515,915 628,
606 8,180
10-23
includes U.S., Canada, Mexico, and Chile.
SOURCES IMF International Financial
Statistics, Direction of Trade OECD National
Account, EC Committee Indicators of Market Size
for 115 Countries, Crossborder Monitor, August
27, 1997 and International Marketing Data and
Statistics. 1997 (London Euromonitor, 1997).
Irwin/McGraw-Hill
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Economic Community of West African States (ECOWAS)
? Benin ? Liberia ? Burkina Faso ? Mali ?
Cote d Ivoire ? Mauritania ? Gambia ?
Niger ? Ghana ? Nigeria ? Guinea ?
Guinea-Bissau
10-24
Irwin/McGraw-Hill
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Southern African Development Community (SADC)
? Angola ? South Africa ? Botswana ?
Swaziland ? Lesotho ? Tanzania ? Namibia
? Zambia ? Malawi ? Zimbabwe ?
Mauritius ? Mozambique
10-25
Irwin/McGraw-Hill
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Afro-Malagasy Economic Union
? Benin ? Gabon ? Burkina Faso ?
Mali ? Cameroon ? Mauritania ? Central
African Republic ? Niger ? Chad ?
Senegal ? Peoples Repub. of the Congo ?
Togo ? Cote dIvoire

10-26
Irwin/McGraw-Hill
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East African Customs Union
? Ethiopia ? Tanzania ? Kenya ?
Uganda ? Sudan ? Zambia
10-27
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Maghreb Economic Community

• ? Algeria ? Tunisia
• ? Libya ? Morocco

10-28
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Economic Community of West African States (ECOWAS)
? Benin ? Guinea-Bissau ? Burkina Faso ?
Liberia ? Cote dIvoire ? Mali ? Gambia
? Mauritania ? Ghana ? Niger ? Guinea ?
Nigeria
10-29
Irwin/McGraw-Hill
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West Africa Economic Community
? West Africa Economic Community ? Senegal ?
Mali ? Togo ? Mauritania ? Burkina Faso ?
Niger ? Cote dIvoire ? Customs and Economic
Union of Central Africa (CEUCA) ?
Cameroon ? P. Rep. Of Congo ? C. Africa
Repub. ? Gabon
10-30
Irwin/McGraw-Hill
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Customs and Economic Union of Central Africa
(CEUCA)
? Cameroon ? P. Rep. Of Congo ? C. Africa
Repub. ? Gabon
10-31
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Arab Common Market
Iraq
Kuwait
10-32
Jordan
Syria
Egypt
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Economic Cooperation Organization (ECO)
Pakistan
Iran
10-33
Turkey
Azerbaijan
Turkmenistan
Uzbekistan
Irwin/McGraw-Hill
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Future Multinational Trade Groups
? United States/Japan ? Hong Kong/Taiwan/China ? A
sia-Pacific Rim Countries ? Hong
Kong/Taiwan/Coastal Provinces of Southern China
? Western Hemisphere Free Trade Area ?
Transatlantic Free Trade Area
(United States and European Union)
10-34
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