International Economic Integration, Trade Blocs, and Global Disparities
Mechanisms of Economic Integration
Economic integration mechanisms are based on different convenios (agreements) agreed upon between countries to allow a greater degree of economic cooperation by reducing tariff and non-tariff barriers. Five different stages can be distinguished:
- Area of Preferential Tariffs: Characterized by the reduction of tariffs between two or more countries. These reductions typically cover only a few products.
- Free Trade Area: Characterized by the partial or total reduction of tariffs among the member countries that make up the block.
- Customs Union: Characterized by reciprocal trade liberalization of all goods produced by the partners and the adoption of a common tariff policy in relation to the rest of the world (Common External Tariff).
- Common Market: Characterized by the free movement of goods, services, and factors (labor and capital), in addition to the use of a common external tariff.
- Economic Union: This represents the highest degree of integration. It is characterized by forming a common market where, in addition, there is a total common currency and harmonization of economic policies of member countries.
The 2003 Iraq War and International Diplomacy
On the political front, Iraq’s interim constitution was signed on March 8, 2004. On June 8, 2004, the UN Security Council sanctioned Resolution 1546 regarding respect for the territorial integrity of the country.
This war is often viewed as a defeat for the diplomacy of the international community. Conflict serves no purpose. Governments should make every effort to avoid armed conflict, prevent its escalation over time, or stop it from spreading to other areas. Peace arises when people are treated with dignity and cultural values are recognized.
Global Economic Inequalities Between States
Economic disparities define the global system, categorizing nations based on wealth, power, and technological capacity:
Core Countries (Developed Nations)
These are the most powerful and richest countries, often called developed nations. Their dominance in the world system grants them great influence over the rest. They typically set the rules of the game in global trade due to their superior ability to generate technology, access to capital, and possession of the most powerful and efficient enterprises. Examples: The European Union, Canada, USA, Japan, and China.
Peripheral Countries (Underdeveloped Nations)
These are the poorest countries. Their exports generate revenues that are often insufficient to develop their economies adequately.
Semiperipheral Countries
These nations, typically undergoing development, are characterized by being very strong in certain sectors which serve as the main source of export revenue and national income.
The European Union (EU)
The EU is a unique community of European countries established on November 1, 1993, when the Maastricht Treaty came into force. (For more information on international organizations, see Wikipedia).
European Countries and Capitals Mentioned
- Portugal
- Spain
- France
- England (UK)
- Ireland (Capital: Dublin)
- Switzerland (Capital: Bern)
- Italy
- Belgium (Capital: Brussels)
- Netherlands (Capital: Amsterdam)
- Germany
- Austria (Capital: Vienna)
- Czech Republic (Capital: Prague)
- Poland (Capital: Warsaw)
- Denmark (Capital: Copenhagen)
- Norway (Capital: Oslo)
- Sweden (Capital: Stockholm)
- Finland (Capital: Helsinki)
- Estonia (Capital: Tallinn)
- Russia
- Latvia (Capital: Riga)
- Lithuania (Capital: Vilnius)
- Belarus (Capital: Minsk)
- Ukraine (Capital: Kiev)
- Romania (Capital: Bucharest)
Labor Flexibility and Social Impact
Labor flexibility policies often favor the interests of firms and seek to weaken the role of worker representation through trade unions. Consequently, it is common for poorly paid and low-skilled jobs to be disproportionately carried out by ethnic minorities and women.
Global Trade and Regional Economic Blocs
Economic integration policies recently focus on forming regional blocs. While the concept of integration blocks is not new, recent trends privilege trade among countries forming a bloc, especially concerning the most recent products and technologies.
Despite the formation of regional blocs, the advance of globalization has significantly increased world trade, justifying the creation of organizations like the World Trade Organization (WTO) in 1995.
The results of integration differ by case. For example, within MERCOSUR, Argentina is Brazil’s largest customer, while Brazil was Argentina’s second-largest customer in the nineties.
Trade patterns show significant concentration: Japan developed 70% of its trade within the Asia-Pacific region. Furthermore, approximately 85% of world trade takes place among developed countries themselves, primarily centered around the United States, Japan, and Europe.