ADMN 417 Lecture Notes - Lecture 7: Foreign Direct Investment, Trade Bloc, Trade Diversion

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Chapter 8: regional economic integration: the need for this is so countries can export resources easier, while gives the lower class countries a better chance to better themselves. Eu: political union, -countries coordinate aspects of economic and political systems, -members accept a common stance on economic and political policies regarding nonmember nations. Nations are allowed a degree of freedom in setting certain political and economic policies within their territories: trade creation. Increase in trade that results from regional economic integration. Gives consumers and industrial buyers a wider selection of goods and services not available beforehand. Buyers can acquire goods and services more cheaply following the lowering of trade barriers such as tariffs. Lower costs lead to higher demand for goods because people have more money after a purchase to buy other products: greater consensus. Eliminating trade barriers in smaller groups of countries may make it easier to gain consensus as opposed to working in the far larger wto: political cooperation.

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