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Since the North American Free Trade Agreement (NAFTA) of 1994, the economic interdependence of Canada and the United States has continued to grow. With Mexico now beginning to integrate itself much more strongly with the U.S. economy, NAFTA has emerged as a strong economic block with nearly as high a degree of integration as the E.U. Furthermore, NAFTA’s economic integration is growing at a faster rate. The data to support these findings are examined in this paper.

This chapter explains the interrelationships between trade markets of Croatia, Bosnia and Herzegovina, and Serbia, which have experienced the same political, economical, and social changes due to their postwar market orientation. Particularly, the research is focused on the relationships between retailers and their suppliers, the effects of 2008 financial crisis, and changes in customer behavior on those markets.

The chapter builds upon the investigation of the existing literature on trade in selected Southeast European (SEE) countries targeting three time-periods: planned economy era; period after the launch of the economic transition; and the European Union (EU) accession preparation era. The supporting fieldwork is based on qualitative interviews with senior managers in trade companies operating on all investigated markets. Results are compared with other secondary data sources.

The research has contributed to the understanding of similarities and differences on three markets of former Yugoslavia: Croatia, Bosnia and Herzegovina, and Serbia. Four areas are used as a framework for explaining the level of cooperation and interdependence between trade companies on investigated markets: changes in retail forms, growth in retail operations, increasing importance of the relationships with suppliers, and penetration of private labels.

Results of the study provides some directions for suppliers on the selected markets and for retailers as well. As retailers rely on their key suppliers, local suppliers should offer them elements of differentiation. On the other hand, results give an insight into actual situation on the markets of Bosnia and Herzegovina, Croatia, and Serbia regarding retail structure, number of retail forms, private labels, etc.

Considering an extensive literature review, the analysis of data given in official statistical databases, as well as qualitative study among trade managers, these findings have important managerial implications for retailers and suppliers.

National borders are a hurdle to the expansion of the open economy. Integration today remains imperfect because national borders translate into trading costs, including differences in monetary regimes. Political borders shelter many goods and services from external competition and, consequently, represent a critical exogenous force in the integration process. Small economies face thicker borders than large economies. Regional trade arrangements have softened or, in some cases, pushed outward national borders, but in the process new borders have emerged. Borders affect also finance and monies. While the speed of financial integration suggests currency consolidation and a decline in the ratio of independent monies to sovereign nations, the formation of multilateral monetary unions (MUs) pushes the ratio toward unity.

The most powerful observation of Keynes is the potential role of prisoners' dilemma setting the forces for an over-arming by individual nations since each individual decision is correctly based on individual rationality, which unfortunately brings the collective disaster of an excessively armed world. The over-arming only hurts us by reducing our economic well-being, which clears the way for a violent conflict. How do we get out of this collective mess? Keynes suggested the role of negotiation, arbitration and coalition formation and application of moral ethics and penalty mechanism to break the tyranny of the prisoners' dilemma – a strategic concept unknown to Keynes.

During the last few decades, rising intra-regional volumes of trade as well as air passenger traffic have been key characteristics of Asia-Pacific’s economic development. Although conceptual and empirical linkages between rising levels of trade and air passenger flows are often assumed, relatively little is known about the potential causality in these parallels. In this chapter, we seek to empirically uncover this causality through the application of heterogeneous Time Series Cross Section Granger causality analysis for the period 1980–2010. Four scenarios are found amongst the different country-pairs: (1) there is no co-evolution, implying that both patterns develop independently (e.g. Japan–Australia); (2) there is ‘real’ co-evolution in that both patterns influence each other through feedback loops (e.g. South Korea–Philippines); (3) air passenger traffic is facilitated by trade (e.g., South Korea–Philippines); or (4) trade is facilitated by air passenger traffic (e.g. Australia–Malaysia). Some possible interpretations of this heterogeneity are discussed.

With more than half the population of the world and a reasonably large resource base, the progressive industrialization of the Asian economies beyond Japan following their open economic policy initiative in the recent decades has resulted in a dramatic increase in the gross domestic output of the regional economies, increased inflows of varied forms of foreign investments, and huge leaps in productivity. The exploration and expansion of markets for goods produced followed. The portion of exports of the new manufactures sent to international markets to earn export revenues in convertible currencies became a necessity for the success of profit repatriation by foreign investors from savings-rich countries (Chapters 1 and 3). Independent of that, theses economies had surpluses of goods produced and they engaged in mutual intra-regional trade for a number of reasons.

This chapter investigates the evolution of cross-strait economic relations and Asian regional integration and its implications for future development in the region. Trade and investment in Asia is fundamentally market-driven, and cross-border FDI is the major driving force. This investment-induced trade explained the cross-strait economic relations and intensive trade in intra-industry and intra-regional trade in Asia. The rise of China in 1990s with the assistance of Taiwanese firms further accelerated the trend of integration by forming regional production networks. However, after 2000 institutional arrangement like bilateral or plural-lateral FTA emerged to normalize and institutionalize the de facto economic integration. RCEP and TPP have evolved as the two major platforms for Asian regional cooperation with two key players, China and the United States, on each side. We argue that in the long run the win-win solution that the two platforms will further merge into FTAAP, which benefits all participants including China and the United States. However, in the short run, based on its 50 years of developmental experience, Taiwan can play an important role to promote and consolidate Asian regional integration as a technology provider and resource coordinator for the region and a risk buffer for entering Chinese market. We thus propose a roadmap for Taiwan and China to jointly participate in regional integration process. In the intermediate run, Asian economies need to change the structure toward more regional-centered trade in final goods through domestic consumption market in order to reduce the dependence on Western markets and mitigate any loss may arise from external shocks.

Purpose − This chapter reconsiders the role of the WTO in the world economy, where regional free trade agreements have proliferated to threaten its basic rule of multilateral and non-discriminatory tariff reduction and the deepening of globalization has developed international concern about labor and environmental standards to challenge its conventional practice of tariff negotiation.

Methodology/Approach − This chapter employs the general equilibrium approach of welfare economics in its analysis.

Findings − It is shown that the WTO should reconfirm its target of expanding and securing the market access property rights of member countries and engage in the international coordination of tariffs and other trade policy instruments to achieve this target, while leaving other policy targets such as propagating labor and environmental standards to other appropriate international organizations.

Practical implications − The steady move towards multilateral free trade has come to an end. This chapter offers a clear argument for economists and policy makers to regain confidence in the traditional role of the WTO/GATT.

This chapter discusses the creation of the Pacific Alliance comprising four countries: Mexico, Chile, Peru, and Colombia. It shows that is not only a free trade agreement between these countries but also a multidimensional regional integration with political, economic, and cultural perspectives. Programs and actions have been structured in a way that allows and promotes integral growth of Latin American citizens. For this reason, it is important to analyze in this chapter the opportunities that Alliance Pacific generates with respect to each of these three aspects. (1) Political and diplomatic implications like eliminating visa requirements for the members, sharing some embassies, facilitating labor mobility between these countries, and proposing the creation of a joint parliament. (2) Economic and trade implications with a gradual elimination of tariffs that will allow companies to be more competitive, creation of different government agencies in each country to support business and promote intra-regional trade of goods and services, and create a joint platform to promote innovation, entrepreneurship and gender equity. Finally, (3) Cultural and educational implications, as the creation of “Student and Academic Mobility Platform” of the Pacific Alliance with scholarships for students and researchers, the integration of a “Technical Education Group” to foster integration and social inclusion of children and adolescents, and the creation of “Sports Diplomacy Program” and a “Scientific Research Network on Climate Change.” Although there are still several challenges for improvement in the Pacific Alliance, it is an agreement that will bring stability, welfare, and development effects for the members of these countries.

It has been demonstrated by Rugman and his colleagues that a majority of the activities undertaken by the world's largest 500 MNEs, such as sales, assets, and employment, are regional in nature. This evidence has also been extended to trade and FDI patterns of OECD countries. Given the costs associated with doing business in foreign and distant markets, one may expect there to be a regional concentration in such activities. That is, the concentration of MNE activities in regional markets may be consistent with a transactions cost model. The objective of the analysis undertaken in this paper is to measure the extent to which the concentrations of OECD MNE activities can be explained by a formal transactions costs model (the gravity model in this case). These results are important for two main reasons. To the extent the concentrations are consistent with a formal model, then, first, this would provide further theoretical arguments in support of Rugman's hypotheses, and second, this would indicate that MNE managers have it right – that is, the activities of the corporations they manage are as global as they should be. On the other hand, if the activities are not fully explainable by atransactions cost model, the implications would be quite different. Theresults indicate that although some activities can be explained by a gravity model, many dimensions of OECD MNE activities, especially within the EU, are not explainable using a gravity model. That is, many of the activities of EU MNEs are more regionally concentrated than would be predicted by transactions costs.