International and supranational institutionalized integration

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International and supranational institutionalized
integration

• Dr. Truong Thi Kim Chuyen

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• Economic change and the new geopolitics
• International and supranational institutionalized
  integration
• The logic of integration
• Types and levels of integration
• The GATT (General Agreement on Tarriffs and
  Trade) framework and the WTO
• Institutional forms of supranational integration

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• Spatial outcomes of economic integration
• The imprint of the european union
• Trade creation and diversion
• Spatial polarization
• Effects of the common agricultural policy
• Regional policy
• External effects of the EU

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Economic change and the new geopolitics

• Although private companies are by no means
  absolute masters of their own fate, they do have
  the ability (as compared with governmental units)
  to redefine their commitments and objectives in
  response to the changing opportunities presented
  by the globalization of the world economy.
• What has happened is that the logic of the world
  economy has in many ways transcended the scale of
  nation state.
• It was the international trade system that
  provided the major impetus for countries to be
  draw into various forms of institutionalized
  integration.

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• The particular advantages of formalized
  international and supranational integration
  include
• Potential for economies of scale, particularly
  for the smallest countries and the weakest
  national economies.
• Potential for creating multiplier effects from
  the existence of enlarged markets.
• Potential for strengthening regional interaction
  by easing the movement of labor, goods and
  capital.

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• The particular disadvantages of formalized
  international and supranational integration
  include
• Potential loss of national sovereignty over a
  broad spectrum of issues.
• Potential for the intensification of internal
  inequalities as a wider geographical context make
  for more pronounced process of uneven
  development.

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TYPES AND LEVELS OF INTEGRATION

• Formal
• Informal
• International
• Supranational
• Economically
• Strategic
• Political
• Sociocultural
• Mixed

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INSTITUTIONAL FORMS OF SURRANATIONAL INTEGRATION

• Free trade association member counties eliminate
  tariff and quota barriers to trade from other
  member states, but each individual member
  countries to charge its regular duties on
  materials and products coming from outside the
  association.
• Customs union also involves the elimination of
  tariffs between member states, hut has a common
  protective wall against non-members.
• Common market internal restrictions on the
  movement of capital, goods, labor and enterprise
  are removed.

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• Supranational political union a single monetary
  system and a central bank, a unified fiscal
  system, a common foreign economic policy and a
  supranational authority with executive, judicial
  and legislative branches.
• Trade preference associations

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SPATIAL OUTCOMES OF ECONOMIC INTEGRATION

• Trade creation effects
• Trade diversion will have taken place, with the
  result that consumption is shifted away from
  lower cost external sources to higher cost
  internal sources, consumers have to pay more for
  certain goods and levels of living may be
  depressed.

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• It is relatively easy for core states to meet the
  political, social and cultural prerequisites for
  successful economic integration. These include
• Similarity in the power of units joining the
  association
• Complementarity of elite value systems
• Existence of pluralistic power structures in
  member countries
• Positive perceptions concerning (a) the expected
  equity of the distribution of benefits from
  integration and (b) the magnitude of the costs of
  integration
• Compatibility of states decision-making styles
• Adaptability, administrative capacity and
  flexibility of member states governments and
  bureaucracies.

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SUMMARY

• In the practice, the basic principles of economic
  geography has resultes in three main outcomes
• Reinforcement of the dominant core-periphery
  structure of the world economy.
• Spatial reorganization of production as trade
  creation and trade diversion affect both member
  and non-member states.
• Creation and intensification of regional
  polarization as the economies of scale and
  multipier effects in regions most favoured by
  integration create backwash effects elsewhere.