Regional Market Groups and Implications

Regional market groups and implications
Definition
Regional markets are populations in certain areas that share common characteristics and are
distinguishable from other regions. The area can be part of a nation-state or consists of several
nation-states.
Regional market group refers to an agreement among two or more countries or states to
promote trade. Regional Integration is a process in which neighboring countries enter into an
agreement in order to upgrade cooperation through common institutions and rules.
The importance of Regional Market groups can guide an organization to make the proper
decisions to meet the needs of the market.” Developing the skills of local marketing groups is
also important to increasing the return a company sees on its investments.
Some examples of regional market groups are:

● ASEAN (Association of Southeast Asian Nations)- ASEAN is a political and economic
union of 10 member states in Southeast Asia which are Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Vietnam. is a
regional grouping that aims to promote economic and security cooperation among its
ten members
● EU (European Union), A trade agreement with 15 European countries including
Belgium, Denmark, Germany, Finland, France, Greece, Ireland, Italy, Luxembourg,
Netherlands, Austria, Portugal, Spain, the United Kingdom and Sweden. The purpose of
this is to promote peace, its values and the well-being of its citizens, offer freedom,
security and justice without internal borders, while also taking appropriate measures at
its external borders to regulate asylum and immigration and prevent and combat crime.
● NAFTA (North American Free Trade Agreement)- An agreement among the U.S.A.,
Canada, and Mexico or Tri-lateral trade bloc in North America. The purpose is to reduce
the trading costs, increase business investment and help North America to be
competitive in the global market.
● Mercosur (Southern Common Market). This South America Trade Bloc includes
Argentina, Brazil, Paraguay and Urugauy. The Purpose of this is to promote the fluid
movement of goods, people and currency among full, associate and observer countries.
TheAssociate Countries: Bolivia, Chile, Columbia, Ecuador, Guyana, Peru, Suriname
while the observer countries are Mexico and New Zealand.
● APEC (Asian Pacific Economic Cooperation Forum). This includes NAFTA members,
Japan, and China. The purpose of this is to promote sustainable economic growth, trade
and investment, and prosperity in the Asia-Pacific region.
5 Level of regional economic integration:
Regional Cooperation Groups.

● The most basic economic integration and co-
operation is the regional cooperation for development (RCD).
● In the RCD arrangement,
governments agree to participate jointly to develop basic industries beneficial to each
economy.
● Each country makes an advance commitment to participate in the financing of a new
joint venture and to purchase a specified share of the output of the venture.
Free Trade Area (FTA)

● it requires more cooperation and integration than the RCD.
● It is an agreement between two or more countries to reduce or eliminate customs duties
and nontariff trade barriers among partner countries while members maintain individual
tariff schedules for external countries.
● Essentially, an FTA provides its members with a mass market without barriers to impede
the flow of goods and services.
● Sometimes, a group of countries from a continent also enter into such agreements to
form a continental free trade area. By allowing each member nation to freely trade
goods and services between them, it results in optimum utilization of relative efficiency
and cost optimization along with regional development.
● A lot of Free Trade areas are created to promote regional growth.
Customs Union.
● A customs union represents the next stage in economic cooperation. It enjoys the free
trade area’s reduced or eliminated internal tariffs and adds a common external tariff on
products imported from countries outside the union.
● The customs union is a logical stage of cooperation in the transition from an FTA to a
common market. The European Union was a customs union before becoming a common
market. Customs unions exist between France and Monaco, Italy and San Marino, and
Switzerland and Liechtenstein, to name some examples.
Common Market.
● A common market agreement eliminates all tariffs and other restrictions on internal
trade, adopts a set of common external tariffs, and removes all restrictions on the free
flow of capital and labor among member nations. Thus, a common market is a common
marketplace for goods as well as for services (including labor) and for capital. It is a unifi
ed economy and lacks only political unity to become a political union. The Treaty of
Rome, which established the European Economic Community (EEC) in 1957, called for
common external tariffs and the gradual elimination of intramarket tariffs, quotas, and
other trade barriers. The treaty also called for the elimination of restrictions on the
movement of services, labor, and capital; prohibition of cartels; coordinated monetary
and fiscal policies; common agricultural policies; use of common investment funds for
reregional industrial development; and similar rules for wage and welfare payments. The
EEC existed until the Maastricht Treaty created the European Union, an extension of the
EEC into a political union.
Political Union
● Political union is the most fully integrated form of regional cooperation. It involves
complete political and economic integration, either voluntary or enforced. The most
notable enforced political union was the Council for Mutual Economic Assistance
(COMECON), a centrally controlled group of countries organized by the Soviet Union.
With the dissolution of the Soviet Union and the independence of the Eastern European
bloc, COMECON was disbanded.
Which organization are involved?

The Inter-Regional Dialogue on Democracy (IRDD) is a platform for engagement among
regional organization on democracy and related issues. The Regional organozation included
● African Union (AU)
● Association of Southeast Asian Nation (ASEAN)
● Council of Europe (COE)
● European Union (EU)
● League of Arab States (LAS)
● Organization of American States (OAS)
● Pacific Islands Forum (PIF)
● South Asian Association for Regional Cooperation (SAARC)
The implications of regional market groups can be both positive and negative. Here are some
of them:
Positive implications:
1. Increased trade: Regional market groups can lead to increased trade within the region. This
can benefit countries or states by increasing the market for their goods and services and
boosting their economies.
2. Investment opportunities: Regional market groups can attract foreign investment by offering
a more stable and predictable business environment.
3. Shared resources: Regional market groups can help countries or states share resources,
leading to more efficient use of these resources and improving regional development.
4. Political stability: Regional market groups can promote political stability within the region by
creating a platform for dialogue and cooperation among member countries or states.
Negative implications:
1. Unequal benefits: Regional market groups can lead to unequal benefits among member
countries or states. Larger and more developed economies may benefit more from the
agreement, while smaller and less developed economies may struggle to compete.
2. Job displacement: Regional market groups can lead to job displacement or job loss in some
sectors or industries that cannot compete with other member countries or states.
3. Over-reliance on a few products: Regional market groups can lead to over-reliance on a few
products or industries, which can be risky if demand for these products or industries declines.
4. Trade barriers with non-members: Regional market groups can create barriers to trade and
investment with non-member countries or states, which can lead to inefficiencies and reduced
competitiveness.
In conclusion, regional market groups can have significant implications for member countries or
states. It is important for policymakers and stakeholders to carefully consider these implications
and promote fair and inclusive regional integration.

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Regional market groups and implications

Some examples of regional market groups are:

5 Level of regional economic integration:

Regional Cooperation Groups.

Free Trade Area (FTA)

Which organization are involved?

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