MINI CASE STUDY FOR: Interdependence and Gains from Trade Discussion Questions: 1 . Why is interdependence in the MENA area seen as important? Applying the interdependence in MENA region would help overcoming several problems that have been affecting the economic growth in the region. The production rate (Quantity) is sometimes not even enough to fulfill the region’s needs, which forces them to import those products. The quality of produced products in the region is not as high enough. Add to this the increasing unemployed unskilled labors that results in ncreasing the internal problems and crimes.
The high cost of products and services in the MENA region is a result of the lack of interdependency. The region has limited incomes and resources and the economic growth is highly affected by the lack of regional integration. That all results in political instability in the region which has been notices in the recent years. The most important output from applying the interdependency and regional integration will be the specialization. Being specialized will help the region to gain experience and focus on producing certain products.
That results in high quality products, large production rate; that supplies the region with its need and enough to export and trade off; and also reduces and kills the unemployed labors. 2. What would be some of the economic impacts and benefits of the actions being taken by the US, EIJ and other states? Those actions being taken by the US, ELI, and other states help achieving the comparative advantage for each region in certain specialized products which will lead to producing higher qualities and quantities at lower prices.
Applying these actions provide those regions with variety of products nd services, increasing competition, preventing market failures, and offering different qualities and prices. It will also enhance more employing opportunities for those unemployed labors. There will be a well noticed change in the economic growth and reduction in costs and budget which has a reflection on the quality of the life in the countries and states. That improves the quality of life, increases incomes, and increases stability. 3. What other actions could be taken within MENA area to increase interdependence and gains from trade.
Having free trade agreements internally between MENA region as well as the regional integration and facilitating the export and import regulations among countries in MENA. Exchanging experiences and resources among countries in the MENA region will help improve the productions and services. Tax free, and cancelling import & export fees on products and services coming from MENA region. Globalization and increasing the economic integration among national economics and political interdependence among nations will help increase the gains trade off. Interdependent trade By researchpioneers
