In Favor of Regional Integration Integrating regions into a trading bloc can have some positive and influential aspects for the countries within that trading bloc. Free trade within these nations can helps secure stability within the economies, generate more product at a cheaper rate then without the integration, and assist with creating peace between the nations with peaceful conflict resolutions. The Association of the Southeast Asian Nations has created such a trading block between 10 nations over three decades ago which has been helping to build and sustain the economy of these nations in Southeast Asia.
The regional integration of the Association of Southeast Asian Nations (ASEAN) includes Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Lao PDR, Myanmar, and Cambodia. Advantages that are seen by this regional integration is to help these nations accelerate in the cultural development, economic growth, and social progress by being able to trade goods or services freely between one another. Another advantage is the existence of peace it brings between the nations.
Since the development of the ASEAN trading bloc there have been no conflicts between the nations and they have pledged to peacefully resolve all settlements and disputes, this ensures that the regions live in a peaceful and harmonious environment. Further advantages include sharing common goals, objectives, and visions with one another. Free trade between the nations allows each to develop more goods or services that they can produce more efficiently allowing for reduced consumer costs between the nations of the trading bloc.
By being able to produce in a more efficient manor also has a result of a greater world production which would not be possible with trade restrictions due to tariffs and such. Economic growth can also be attributed to trading blocs. With nations being able to transfer knowledge from different sectors and the know-how also increases production in the nations which stimulates the economic growth within the trading bloc. When nations can combine with each other they can become stronger nations economically being able to produce more of the goods nd services while being able to export to other nations or trading blocs with a reduced cost while sharing all other goods and services within the trading bloc. Against Regional Integration Trade blocs are setup between different nations to allow for low or free trade between the nations whom are members within that trade bloc. Many different standards exist on how trade blocs are setup and no standard rules exist that need to be applied within the different trade blocs.
One trade bloc can have the same currency share the same standards when importing or exporting goods to nations not in the trade block while other trade blocs allow the nations to decide how they want to trade with other nations not within their bloc and only control trading within the nations that are members of that bloc. One thing that does not fare too well with regional economic integration is that each nation is run individually with own governments money system and everything is not seen eye to eye. Conflicts can occur between the nations that have free trade and not every government is going to run their economics the same way.
Some of the nations may apply high tariffs to other countries which import goods in while others may have low or no tariffs for the same countries. Another problem that could arise with trade blocs is that each trade bloc will have free trade within their supporting nations but in order to protect their markets from competition outside of their bloc they could impose high tariffs, if this were to happen the benefits resulting from having a trade bloc could more than offset by the decline from trading between the blocs.
Within the Association of Southeast Asian Nations (ASEAN) trade bloc each nation can set his or her own tariffs for trade with nations that are not in their trade bloc. Again, this could cause some discomfort between the other nations within the ASEAN trade bloc. One of the fundamental principals within this trade bloc is non-interference of the internal affairs of one another, even with this principal set into place tensions could arise if one nation decides to do something that another does not like.
References Hill, Charles W. L. (2007). International Business: Competing in the Global Marketplace (7th ed. ). New York: McGraw-Hill/Irwin. Retrieved on 18 Dec 2008, from https://ecampus. phoenix. edu/content/eBookLibrary/content/eReader. html South Asian Association for Regional Cooperation (n. d. ). South Asian Association for Regional Cooperation. Retrieved December 19, 2008, from http://www. saarc-sec. org/? t=1