In several countries, there already exist centres for technological development specialized or generic in various fields ranging from agriculture and livestock to the aeronautic and pharmaceutical industries, among others.
There is no reason not to integrate these centres. We should do so in order to take advantage of their synergies and use the resources generated in the region for the benefit of all of Latin America. The major powers specifically use these rules to stop small countries and emerging economies from coordinating their productive activities with the goal of exporting to markets outside of the region.
Small and medium enterprises as a priority Another element is providing general or sector-based incentives for the development of small and medium enterprises SMEs. SMEs could be stimulated by the integrated development of regional markets. They could also operate in a range of fields — from software development to tourism e. Small and medium enterprises offer real potential in terms of job creation. Moreover, by linking them to the regional integration process — that is, one that truly supports development — they could lend significant social legitimacy to the process.
Regional food sovereignty and support for family farming in small and medium production units The viability of certain local and regional items produced by family and peasant farmers is compromised by the limits of consumption in these regions and in some countries. Therefore, the creation of a regional market could help to guarantee the viability of a more diversified production of agricultural products.
This production must differ from the homogeneity of the products and productive processes that are typical of agribusiness, with its highly concentrated and transnationalized commercialization structure and technological packages.
The distribution of these products could also gain momentum and promote regional gastronomy, gastronomic tourism and other activities that could generate economic dynamism and foster cultural integration. It must take advantage of the diversity of existing modes of transportation and take into account local solutions for addressing environmental and climate issues.
It must also consider regional perspectives for technological production and development and the possibility of creating regional public enterprises. Here, we need to think big, as problems in long-distance transportation cannot be resolved by building more highways. Why not think of reactivating and integrating local and regional railway systems? Why not think of integrating sea and river transportation by taking advantage of what already exists?
Why not think of creating a regional airline company that makes the integration of a network of medium-size cities in the region feasibly by using small- and medium-size planes that the aeronautic industry in the region already has the potential to produce..
We are not talking about an abstract problem, but rather one that every Latin American who has attempted to travel or transport cargo within the region has faced. It is important that we consider the impact of these processes in each country.
We must also reaffirm strong support for the improvement of public transportation in urban centres, as a way to discourage the use of individual means of transport that have impacts on the demand for energy.
Regional financial integration The debate about the Banco del Sur brought to light the political challenges and different perspectives that exist in various countries. But it also showed the enormous potential and the need to develop a regional financial system that could simultaneously regulate finances on the regional level and protect economies in the region and the regional economy from external shocks. It should also create one or more mechanisms for fostering regional development and allow for a dynamic process of exchange between the Latin American economies, which does not mean sanctioning, through the use of currency, the power of the central capitalist economies.
In other words, it should allow for the creation of a regional currency or a system in which a common unit of reference that does not necessarily aim to make a common currency feasible would be used in the region.
Rather than acting as restrictions, the difficulties and financial turbulence should serve as a motive for intensifying discussion on and actions aimed at moving forward with the process of regional regulation and financial development. Regional energy solidarity and complementarity Difficulties in regulating potential energy generation through regional agreements should have led to the consolidation of a regional public entity that regulates and promotes an integrated energy system.
Moving beyond limited national interests, efforts to render energy generation feasible at the regional level must promote the use of all alternative sources, so that production methods are the least harmful as possible to the environment while, at the same time, ensure the satisfaction of a new pattern of production and consumption that will be established by an alternative regional development process.
Reducing distances between producers and consumers to decrease the amount of energy used to transport products could be one of the many initiatives that would help to consolidate a new energy model. Fundamentally, this new model must be based on the premise of energy sovereignty and solidarity, on striving for increased efficiency and the diversification of energy sources, namely renewable ones. The focus was on the development of the coal and steel industries for peaceful purposes.
In , the six nations signed the Treaty of Rome, which established the European Economic Community EEC and created a common market between the members.
With this treaty, the EU identified three aims. The first was to establish a single, common currency, which went into effect in The second was to set up monetary and fiscal targets for member countries. Third, the treaty called for a political union, which would include the development of a common foreign and defense policy and common citizenship. The opening case study addressed some of the current challenges the EU is facing as a result of the impact of these aims.
Despite the challenges, the EU is likely to endure given its historic legacy. Furthermore, a primary goal for the development of the EU was that Europeans realized that they needed a larger trading platform to compete against the US and the emerging markets of China and India.
Individually, the European countries would never have the economic power they now have collectively as the EU.
Today, the EU has twenty-seven member countries. Croatia, Iceland, Macedonia, and Turkey are the next set of candidates for future membership. In , the twenty-seven EU countries signed the Treaty of Lisbon, which amends the previous treaties.
It is designed to make the EU more democratic, efficient, and transparent and to tackle global challenges, such as climate change, security, and sustainable development. Switzerland has also chosen to not join the EU, although it is part of similar bilateral agreements. Figure 2. All of the Visegrad Group have relatively developed free-market economies and have formal ties. There are twenty-three official and working languages within the EU, and all official documents and legislation are translated into all of these languages.
The EU is a unique organization in that it is not a single country but a group of countries that have agreed to closely cooperate and coordinate key aspects of their economic policy. Accordingly, the organization has its own governing and decision-making institutions. The biggest advantage of EU membership is the monetary union. Today, sixteen member countries use the euro. Second, there are more EU member countries than there are countries using the euro.
Euro markets, or euro countries, are the countries using the euro. The European single market is the foremost advantage of being a member of EU. This single market permits the free flow of goods, service, capital, and people within the EU.
Businesses conducting business with one country in the EU now find it easier and cheaper, in many cases, to transact business with the other EU countries. Further, having a single currency makes pricing more transparent and consistent between countries and markets. This is the case, particularly, for relatively low-skilled labor. It shows how the EU can come out stronger from this crisis and how it can be turned into a smart, sustainable, and inclusive economy delivering high levels of employment, productivity, and social cohesion.
It calls for stronger economic governance in order to deliver rapid and lasting results. It now has twenty-one member economies on both sides of the Pacific Ocean. APEC is the only regional trading group that uses the term member economies , rather than countries, in deference to China. Taiwan was allowed to join the forum, but only under the name Chinese Taipei.
Focused primarily on economic growth and cooperation, the regional group has met with success in liberalizing and promoting free trade as well as facilitating business, economic, and technical cooperation between member economies. The two organizations often share common goals and seek to coordinate their efforts. On June 29, , China and Taiwan signed the Economic Cooperation Framework Agreement ECFA , a preferential trade agreement between the two governments that aims to reduce tariffs and commercial barriers between the two sides.
China already absorbed Hong Kong in , after the hundred-year lease to Britain ended. China is eager for Hong Kong and Taiwan to serve as gateways to its massive market. Beijing is hoping closer economic ties will draw Taiwan further into its orbit. As a political and economic organization, the group focuses on trade, economic, and social issues.
Among its various initiatives, the GCC calls for the coordination of a unified military presence in the form of a Peninsula Shield Force. And while strong economic relations remain the basis for mutual ties, the EU and the GCC also share common interests in areas such as the promotion of alternative energy, thus contributing to the resolution of climate change and other pressing environmental concerns; the promotion of proper reform for the global economic and financial policies; and the enhancement of a comprehensive rules-based international system.
In , the GCC formed a common market, enabling free flow of trade, investment, and workers. Signed in and implemented in , it provides for a staged integration of the regional economic agreements. Several regional agreements function as pillars of the AEC: Economists argue that free trade zones are particularly suited to African countries which were created under colonial occupation when land was divided up, often with little regard for the economic sustainability of the newly created plot.
Plus, post-independence conflict in Africa has left much of the continent with a legacy of poor governance and a lack of political integration which free trade zones aim to address…. Ambitiously, in and after, the AEC intends to foster the creation of a free-trade zone and customs union in its regional blocs. Regional integration helps countries overcome divisions that impede the flow of goods, services, capital, people and ideas.
These divisions are a constraint to economic growth, especially in developing countries. Divisions between countries created by geography, poor infrastructure and inefficient policies are an impediment to economic growth. Regional integration can be promoted through common physical and institutional infrastructure.
Specifically, regional integration requires cooperation between countries in:. Cooperation in these areas has taken different institutional forms, with different levels of policy commitments and shared sovereignty, and has had different priorities in different world regions. Regional integration can lead to substantial economic gains. Regional integration allows countries to:. Working with partners e. World Bank Group engagement is based on a mix of tools:.
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