Chapter 8: Regional Trading Arrangements Note: Please mention the chapter befor

Place your order now for a similar assignment and have exceptional work written by our team of experts, At affordable ratesFor This or a Similar Paper Click To Order NowChapter 8: Regional Trading Arrangements Note: Please mention the chapter before your response/comments. Question: Why has the so‐called common agricultural policy been a controversial issue for the European Union? Discuss the concept(s) relating to the above question. In your analyses, use some of the terms and theories in the e-Text to support your argument(s).Please Note: Be sure to follow the rubric guidelines; you should create a substantive initial response to the the discussion prompt.You should relate your post to the assigned chapter in the eText and other credible source(s) with proper APA in-text citations and references. Failure to properly cite sources will result in a grade of zero.CHAPTER 8 ETEXT:Regional Integration versus MultilateralismRecall that a major purpose of the WTO is to promote trade liberalization through worldwide agreements. However, getting a large number of countries to agree on reforms can be extremely difficult. By the early 2000s, the WTO was stumbling in its attempt to achieve a global trade agreement, and countries increasingly looked to narrow, regional agreements as an alternative. The number of regional trading agreements has risen from around 70 in 1990 to more than 300 today, and they cover more than half of international Regional Integration versus MultilateralismRecall that a major purpose of the WTO is to promote trade liberalization through worldwide agreements. However, getting a large number of countries to agree on reforms can be extremely difficult. By the early 2000s, the WTO was stumbling in its attempt to achieve a global trade agreement, and countries increasingly looked to narrow, regional agreements as an alternative. The number of regional trading agreements has risen from around 70 in 1990 to more than 300 today, and they cover more than half of international Regional Integration versus MultilateralismRecall that a major purpose of the WTO is to promote trade liberalization through worldwide agreements. However, getting a large number of countries to agree on reforms can be extremely difficult. By the early 2000s, the WTO was stumbling in its attempt to achieve a global trade agreement, and countries increasingly looked to narrow, regional agreements as an alternative. The number of regional trading agreements has risen from around 70 in 1990 to more than 300 today, and they cover more than half of internationalRegional Integration versus MultilateralismRecall that a major purpose of the WTO is to promote trade liberalization through worldwide agreements. However, getting a large number of countries to agree on reforms can be extremely difficult. By the early 2000s, the WTO was stumbling in its attempt to achieve a global trade agreement, and countries increasingly looked to narrow, regional agreements as an alternative. The number of regional trading agreements has risen from around 70 in 1990 to more than 300 today, and they cover more than half of international trade. Are regional trading agreements building blocks or stumbling blocks to a multilateral trading system?1 Trade liberalization under a regional trading arrangement is different from the multi­lateral liberalization embodied in the WTO. Under regional trading arrangements, nations reduce trade barriers only for a small group of partner nations, thus discriminating against the rest of the world. Under the WTO, trade liberalization by any one nation is extended to all WTO members, 164 nations, on a nondiscriminatory basis. Although regional trading blocs can complement the multilateral trading system, bytheir very nature they are discriminatory and are a departure from the principle of normal trading relations, a cornerstone of the WTO system. Some analysts note regional trading blocs that decrease the discretion of member nations to pursue trade liberalization with outsiders are likely to become stumbling blocks to multilateralism. If Malaysia has already succeeded in finding a market in the United States, it would have only a limited interest in a free trade pact with the United States. But its less successful rival, Argentina, would be eager to sign a regional free trade agreement and thus capture Malaysia’s share of the U.S. market: not by making a better or cheaper product, but by obtaining special treatment under U.S. trade law. Once Argentina obtains its special privilege, what incentive would it have to go to WTO meetings and sign a multilateral free trade agreement that would eliminate those special privileges? Two other factors suggest that the members of a regional trading arrangement may notbe greatly interested in worldwide liberalization. First, trade bloc members may not realize additional economies of scale from global trade liberalization that often provides only modest openings to foreign markets. Regional trade blocs that often provide more extensive trade liberalization may allow domestic firms sufficient production runs to exhaust scale economies. Second, trade bloc members may want to invest their time and energy in establishing strong regional linkages rather than investing them in global negotiations. On the other hand, when structured according to principles of openness and inclu­siveness, regional blocs can be building blocks rather than stumbling blocks to global free trade and investment. Regional blocs can foster global market openings in several ways. First, regional agreements may achieve deeper economic interdependence among members than do multilateral accords, because of the greater commonality of interests and the simpler negotiating processes. Second, a self­reinforcing process is set in place by the establishment of a regional free trade area: As the market encompassed by a free trade area enlarges, it becomes increasingly attractive for nonmembers to join to receive the same trade preferences as member nations. Third, regional liberalization encourages the partial adjustment of workers out of import­competing industries in which the nation’s comparative disadvantage is strong and into exporting industries in which its comparative advantage is strong. As adjustment proceeds, the portion of the labor force that benefits from liberalized trade rises and the portion that loses falls; this process promotes political support for trade liberalization in a self­reinforcing process. For all of these reasons, when regional agreements are formed according to principles of openness, they may overlap and expand, promoting global free trade from the bottom up. types of Regional trading arrangementsSince the mid­1950s, the term economic integration has become part of the vocabulary of economists. Economic integration is a process of eliminating restrictions on international trade, payments, and factor mobility. Economic integration results in the uniting of two or more national economies in a regional trading arrangement. Before proceeding, let us dis­ tinguish the types of regional trading arrangements. A free trade area is an association of trading nations in which members agree to removeall tariff and nontariff barriers among themselves. Each member maintains its own set of trade restrictions against outsiders. An example of this stage of integration is the North American Free Trade Agreement (NAFTA), which consists of Canada, Mexico, and the United States. Beyond NAFTA, the United States has free trade agreements with many other countries, as seen in Table 8.1.Table 8.1 U.S. Free Trade agreements agreementIsraelCanada NAFTA* Jordan ChileSingapore AustraliaBahrainDate of Implementation 1985agreement Morocco1989 1994 2001 2004 2004 2005 2006CAFTA, DR** Oman PeruSouth Korea Colombia PanamaDate of Implementation 20062006 2009 2009 2012 2012 2012*Members of the North American Free Trade Agreement (NAFTA) include Canada, Mexico, and the United StaFor This or a Similar Paper Click To Order NowRelated