MGT/448 Before stating my opinions of why I would be for regional integration and then, why I would be against it, I will define the term for clarification and understanding. Regional Integration For and Against Articles Generally, globalization has affected manynations in various ways; economically, politically, and socially. will be eliminated. That helps them be prepared-one hopes-for more difficult times like we're in right now. ", For McLendon, the difference between a national and local chain comes down to "Do I have the ability to change something right now?" In the case of both the European Union and the East African Community there are three outstanding benefits that regional integration can bring. "Financing's a little bit of a challenge now," says Haggen Chairman Dale Henley, but the company is looking at opportunities and has properties under option for development. We're probably a lot closer to our people in the stores. "A certain amount of risk is required or else your firm's not going to grow. On the other hand, bilateral agreements are not bound by the rules set by the WTO and do not solely focus on trade-related issues. The latter involves decreasing or eliminating import quotas, export restrictions, tariffs, and other trade-related barriers among states. These scale benefits can arise in public projects (see World Bank 2000 ) and also at the level of the private firm, where they typically interact with imperfectly competitive market structures. Bilateral agreements are not the same as trade deals. "EU and Japan Sign Trade Deal Covering a Third of the World's Economy," Accessed Jan. 8, 2020.Office of the United States Trade Representative. While size can be a competitive disadvantage in retailing, regional retailers try to make the disparity work in their favor. “ Describe the, reliance on others for products and services. It's just how frequently they've done it. Regional integration refers to various economic and political agreements that are formed between sovereign countries. Regional Integration: Concepts, Advantages, Disadvantages and Lessons of Experience1 1. "Free Trade Agreements Australia," Accessed Jan. 8, 2020.Office of the United States Trade Representative. Regional Integration For and Against Articles 3  Pages. in favor of regional integration and another against it. For the moment, expansion plans are on hold, but McLendon says the company hires and trains with the expectation the new employees of today will someday be managers at those new stores. The character of the region may also contribute to the success of regional chains too. 2. Premium Loss by Trade Policies Free Trade benefits from trading among different blocs are lost. Among the most outstanding features of the current processes of regional economic integration are: 1. Disadvantages of membership of China 1. With so many retailers-Costco, Wal-Mart, Target, Rite Aid, Walgreen and the national grocery chains-carrying so much of the same merchandise, Bartell tries to differentiate itself with its photo service, and by featuring products from Northwest companies like Liberty Orchards, Uncle Woody's popcorn and Theo Chocolate. ", But Bartell also says "on some things I think the economies of scale are overdone. Asked the same question, Bartell says, "We're profitable, not as profitable as we'd like to be. Generate global competition 5. All Rights Reserved. George D. Bartell, the company's chief executive and grandson of the founder, says the firm is working on deals for next year as well, although he notes there's no specific number the company tries to add every year. Advantages And Disadvantages Of Regional Integration 1296 Words 6 Pages Regional integration in Africa has been an aspiration that a majority of countries have been working towards for the last few years, most notably after their liberation from colonisation. Investment diversion is a potential economic disadvantage of a regional economic integration program. "The reaction time is much quicker.". This calls for closer international cooperation to ensure that. GLOBAL INTEGRATION: ADVANTAGES AND DISADVANTAGES Globalization is the process by which different societies, cultures, and regionaleconomies integrate through a worldwide network of political ideas throughtransportation, communication, and trade. So how is it that three family-owned, locally-based chains-Seattle-based Bartell Drugs, Bellingham's Haggen Inc. (which owns the Haggen and Top Food grocery-store brands) and Renton's McLendon Hardware-operating in the toughest economy in decades and in two retailing sectors dominated by huge national companies, are not just surviving but looking at growth opportunities? That can mean adjusting the hours a store is open, or stocking an item at just one store that customers have been asking for. February 09, 2013 "Family firms tend to be less willing to take on debt because it's not being leveraged through a corporation the same way," says Catherine Pratt, assistant professor and associate dean at Pacific Lutheran University's (PLU) School of Business. We want the fate of the business to depend on us, not on a bank or vendors or whatever it is.". Disadvantages of trading blocs 1. These are so many attributes that can be considered clear advantages for Tanzania to play a critical role in the EAC and beyond, if a strategic roadmap was to be crafted in Tanzania. Regional Integration For and Against Articles BUS 240 Retailing is a tough business for regional chains in the best of times, having to compete against giant national companies with purchasing power and marketing budgets to match their coast-to-coast networks of stores. ©Copyright 2021 Tiger Oak Media. Especially strong integration -- like the European Union -- can lead to the loss of unique minority cultures within a region. "We've kept our leverage rate low," Bartell says. 5  Pages. So, transaction costs in form of transport, cost of negotiation, cost of control etc. Regional integration is a process in which neighboring states enter into an agreement in order to upgrade cooperation … CNBC. "If we have the cash, we'll consider them," he explains. The South Asian Association for Regional Cooperation (SAARC) is an economic and geopolitical organisation of eight countries that are primarily located in South Asia Even after the formation of SAARC trading bloc, regional integration among the South Asian countries remains minimal. Asked if Haggen is profitable, Henley says "we're doing fine." On brand-name prescription drugs, the prices are set by the manufacturers; a good share is sold only through distributors, so it just depends on what kind of deal we can work out with the distributor." They have to have done it certainly at startup and at each major growth spurt, but it's just the frequency. Yet, a quarter century since its inception the regional process in South Asia has produced limited results and encouraged Sri Lanka to look for bilateral rather than regional solutions. Discuss the advantages and disadvantages of regional integration (nafta, eu, APEC, asean, cafta, ECT) compare and contrast the economic development stages of countries within your chosen region and the ramification of your region's economic development for global business. 3. Deepening of democratic government systems. Growth does matter for the regionals; aside from providing a return to owners, expansion gives "our talented people a … One of the problems faced by many smaller economies is a lack of foreign investment. ", Bartell concurs. University of Phoenix While financial theory might suggest a higher rate of leverage for a higher potential rate of return, "We just don't go there. And both Haggen and Bartell say their companies are doing well financially. "We can't buy cable TV [ads] at the rate the other guys can, but we can advertise in the newspaper and on radio pretty effectively.". She also works with PLU's Family Enterprise Institute. Premium Free trade areas are the simplest form of regional economic integration. The healthy effects of such a regional economic integration are presumed to be as follows: 1. A number of leaders called for the integration of Africa already soon after independence, but it was only Throughout this paper we will discuss the promoting of, cultures, and regionaleconomies integrate through a worldwide network of political ideas throughtransportation, communication, and trade. ADVANTAGES OF VERTICAL INTEGRATION But he's also much more comfortable about growth over the long term. "It's easier to make decisions and to get them done. will be eliminated. To analyse those advantages and disadvantages of organizing a RTA, an apprehension in regional trade understandings is of import. Definition: A regional trade block is the result of economic integration of various trading areas of different countries and it is also known as trade blocks, regional trade organizations, and regional groupings. On advertising, Bartell is "helped a little bit because we have a pretty good share of the market where we operate," he adds. Over the past few decades globalization has brought tremendous benefits to the world, and an even greater reliance on others for products and services. "One of the problems we face is that some companies may have entire offices in Bentonville, Ark., for dealing with Wal-Mart, but they can't seem to afford to send someone to see us twice a year," Bartell notes. The country has signed a bilateral FTA with India in 1999 and with Disadvatages is possible threats to regional integration and development. Throughout this paper we will discuss the promoting of regional integration into the Northern South America region. Advantages And Disadvantages Of Apec And Regional Integration. The overall average cost of the firm will decrease because if the divisions... means for economic growth for many countries. Generally, globalization has affected manynations in various ways; economically, politically, and socially. 16. Premium "We're able to adjust to the trends and the things that [customers] want. There is little doubt that globalization can be a powerful engine for sustained economic growth. Regional Cooperation in South Asia: Sri Lanka’s Views Sri Lanka is a founding member of SAARC. We're pretty happy with where we are.". Trade liberalization and export promotion 3. So, transaction costs in form of transport, cost of negotiation, cost of control etc. The cooperation of localities to address homelessness has produced benefits to citizens and to the governments themselves in the following ways: The risk to each city of moving too far on its own and being seen as an attraction for homelessness is reduced; rather, … Lorayne Henriquez They're not so much worried about this quarter, although that's there; it doesn't go away.". So, like all regional integrations the formation of CARICOM comes with its advantages and disadvantages. Also, the rules governing trade deals are established by the World Trade Organization (WTO). 4. Regional Integration Timothy Callaghan It is a term that refersto the fast integration and interdependence of various nations, which shapes the worldaffairs on a global level. I would imagine each of these firms has done that. "We try to find niches our competitors are not looking to pursue," he says. "Because of that, their planning and their preparation are not quarterly oriented. It will facilitate the trade which will boost Chinese manufacturing industry. 4  Pages. Simply put, a regional trade agreement, or RTA, makes it easier for countries, such as the United States, Canada and Mexico in the North American Free Trade Agreement, to engage in trade.The countries in an RTA may or may not be in close proximity to one another; for example, the United States has regional trading partners located as far away as the Middle East, notes economist Donna Welles. geographic proximity. The slow-and-steady approach has proven to be better protection than sheer size or speed. Premium Emphasis is placed on opening markets, eliminating trade barriers a… With consumers tapped out and finding even window shopping too spendy, these are definitely not the best of times. 5  Pages. United Nations, Asia-Pacific Economic Cooperation, Asia-Pacific 1289  Words | Some of the advantages are, * Foreign Direct Investments (FDI) stimulates economic growth through the sharing of technology, marketing channels, managerial know-how and to … Regional integration has a final non-economic disadvantage. Perhaps we accept lower rates of return just to be safe. Growth does matter for the regionals; aside from providing a return to owners, expansion gives "our talented people a place to go and have a future," Henley says. Another significant difference between the big national retailers and successful regional chains: financial management. 4  Pages. The protection of the local industry helps in the reduction of unemployment as well. The transaction costs can be controlled if a firm acquires the other firms in the vertical chain, then one division of the same company will transfer goods to other divisions. Haggen, he says, has had a compound annual growth rate in sales of 13.5 percent since 1984. Advantages are global influences, a stategic alliance and regional growth opportunities. Even in this economy, revenue will be up about 1 percent this year even if in the short run, the national competitors are posting much fancier numbers. Free trade, Customs union, Economic integration 1181  Words | "In the Northwest, people here are loyal to local businesses," McLendon says. Regional integration is an arrangement where countries in the same region enter into an agreement to enhance economic cooperation through agreed institutions and rules, focused on removing barriers to free trade in the region, increasing the free movement of people, labour, goods, and capital across national borders. The disadvantages of regional integration include limited fiscal capabilities, cultural centralization, creation of trading blocs, diversion of trade and surrendering some degree of sovereignty. trade. "We're more nimble," he states. ... Everybody has different comfort levels with risk. Instead, the agreement usually targets individual policy areas, aiming to increase cooperation and facilit… Premium A flurry of conferences amongst Asian leaders on the last day raised the possibility of forging a regional free trade pact, which is more likely to be raised on the 2009 Asia Pacific Economic Cooperation summit. 6  Pages. It's just, are you betting everything? Regional stability can bring prosperity. Trade bloc, United States, Free trade 1223  Words | The renewed academic interest in regionalism, the emergence of new regional formations and international trade agreements like the North American Free Trade Agreement (NAFTA), and the development of a European Single Market demonstrate the upgraded importance of a region-by-region basis political co-cooperation and economic competitiveness. 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