Regional Paper
Steve Porter
MGT 448
John Jaggi
April 11, 2007
Regional Integration in North America
"Regional integration is a process in which states enter into a supranational regional organization in order to increase regional cooperation and diffuse regional tensions."(Regional, n.d.) Agrrements in regional integration can be made to reduce, and ultimately remove, tariff and non-tariff barriers to the free flow of goods, services, and factors of production between countries.(Hill, 2004 ch. 8) The North American Free Trade Agrrement (NAFTA) is an agreement between the United States , Canada and Mexico that eliminates most tarriffs on products traded between the three countries. This paper will discuss the role of regional integration in promoting global business, discuss the advantages and disadvantages of NAFTA and compare and contrast the economic development stages of the United States , Canada and Mexicoand the ramifications of this region's economic development for global business.
Promoting Global Business
Regional integration removes trade barriers ie., tarriffs between member countries. While the memmbers of a trade bloc agree on trade policy, each member is free to set its own external trade policy. The removal of trade barriers can reduce the cost of production, increase productivity and maximize profits. These factors can increase an organization's willingness to extend its trade to other countries. Regional integration promotes global business by maximizing an organization's abilityand willingness to trade with countries and other organization's around the world.
Advantages of Regional Integration
"Free trade refers to a situation where a government does not attempt ...