Regionalism Economic Benefits

2561 Words11 Pages
Over the previous decade the world has witnessed a resurgence of regionalism. For many years now the world has debated whether regional trade agreements are beneficial or detrimental for development of world economics. Regionalism has recently returned to the forefront of our attention, due to the the decline in world trade, and has led many countries to pursue regional agreements. Currency and banking crises in the last decade in emerging markets has also caused distrust in financial institutions and their ability to prevent and manage such crisis has led to growing interest in financial and monetary cooperation at the regional level. Multiple entities have formed as a result of the rising necessity of regionalism. The European union (EU) has one of the strongest currencies in the world in the euro. The North American Free Trade agreement also known as (NAFTA) is a free trade agreement between the United States, Canada, Mexico, and has joined the North American continent by promoting trade and ending tariffs on various goods and services, and implementing equality. And finally the North Atlantic Treaty Organization, which was established after WWII to prevent war by aligning with nations. Agreements offer countries many advantages. One of the key benefits of countries to enter into agreements with partners is market access. Which is the deduction of tariffs and the outline that measures what goods are taxed , agreed to by members for the entry of specific goods into their markets. Market access encourages scale economies and the diversification of production, are benefactors that apply to productive economic regionalism. Furthermore, many countries that regionally involve themselves with strong economic structures and technological sound nations prosper. As a result foreign competition outside the region becomes less difficult to handle, the
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