chapter3

• MARKET INTEGRATION -As defined by Koester (2000), is a state of affairs or a process involving attempts to combine separate national economies into larger economic regions
• Negative Integration reduces non-tariff and tariff barriers to trade as a main tool for integrating markets
• Positive Integration, adjusts domestic

  policies and institutions through the creation of supranational arrangements
• Preferential is a agreement involves lower trade barriers between those countries, which have signed the agreement
• The free trade area (FTA)

  reduces barriers to trade among member countries to zero, but each member country still has autonomy in

  deciding on the external rate of

  tariff for its trade with non-member

  countries. European Free Trade Area
• Customs union represents a higher stage of economic integration. In this form, countries agree to abolish tariff and non-tariff barriers to trade in goods flowing between them
• The common market allows for free movement of labor and capital withinthe member-countries.
• The Economic Union is the highest form of economic integration. in addition to the conditions of a common market, member countries also agree to integrate monetary, fiscal, and other policies.
• What are the five form of integration?

  1.Preferential

  2.The free trade area (FTA)

  3.Customs union

  4.The common market

  5.The Economic Union
• what are the three INTERNATIONAL FINANCIAL INSTITUTIONS?

  1.World Trade Organization

  2.INTERNATIONAL MONETARY FUND

  3.WORLD BANK
• WORLD TRADE ORGANIZATION

  Formerly known as General Agreement on Tariffs and  Trade (GATT)
• WORLD TRADE ORGANIZATION

  Only global international organization dealing with the rules of trade between nations.
• INTERNATIONAL MONETARY FUND

  Provide such an institution as would exert control on international exchange rates as well as act as reserve base bailing out BOP deficit countries
• INTERNATIONAL MONETARY TRADE

  it is autonomus organization affiliated to the UNIO. From initial strength of 31 members it became 125 membership.
• Function of IMF?

  1. Works as a short-term credit institutions
  2. Provides for the orderly adjustment of exchange rates
  3. Acts as a reserve base for member countries to borrow from
  4. provides foreign exchange loans agains current transactions
  5. Provides international financial consultancy services
• World bank-International Bank for reconstructions and development
• world bank- international and intergovernmental institutions for providing long-term loans on easy terms for specific developmental projects.
• Function of World Bank?

  • Provides loans services to member Governments .
  • Provides development loans on soft terms to poor member nations.
  • Provide support to private or joint sector projects.
  • Provides insurance guarantees to foreign investors
  • Setting investment - related disputes among member nation through concillation or arbitration
• what are the 4 types of Global Corporation?

  International Companies

  Multinational Companies

  Global Companies

  Transnational Companies
• Economic Control - Global corporations have on world trade, financial markets.
• Political Influence - Global corporations have on national governments and regional governance structures
• Social and Cultural Influence - Global corporations have on people’s, attitudes, values, and lifestyle choices through ,media control, advertising, branding
• Environmental Impact - Global corporations have on the natural environment
• what are the 4 power of Global corporations?

  1. Economic Control
  2. Political Influence
  3. Social and Cultural Influence
  4. Environmental Impact
• meaning of MNC?

  Multinational Companies
• what are the 4 role of MNC?

  1. MNC's act as modernizer of the world's economy?
  2. Promote efficiency and growth of the world economy
  3. Promote regional agreements and alliances
  4. Increase of money circulation in the economy
• What are the challenges of Multinational Companies?

  1. Public Relations
  2. Ethics
  3. Organizational Structure
  4. Leadership