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International Business Chapter 9 Critical Questions

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Claudia Perez
Chapter 9 (Critical Discussion Questions)
1. NAFTA has produced significant net benefits for the Canadian, Mexican, and U.S economies. Discuss.
The North America Free Trade Agreement (NAFTA) was passed in 1994. Starting with eliminating the majority of taxes on products traded between the three countries fallowed with a gradual phase-out of other tariffs. The Agreement contributed to more exports. The two way trade between Mexico and the U.S has more than quadruple since the agreement was implemented. Another direct effect is more investments. The U.S is the largest foreign direct investment in Mexico. Investments in Mexico have helped increase the efficiency of U.S domestic production. Also more jobs were created. Even thou some jobs were lost, more and better jobs were created. In conclusion this agreement has benefited all three countries from more free trade.
2. What are the economic and political arguments for regional economic integration? Given these arguments, why don’t we see more substantial examples of integration in the world economy?
The economic argument for regional integration is mostly positive. It’s based on the presence of extra gains from the free flow of trade and investment between the countries involved in the agreement. The political argument is that it is mainly based on geography. The participating countries have to be neighboring countries, and many neighboring countries have border disputes lessing the possibilities for regional integration.
3. What in general was the effect of the creation of a single market and a single currency within the EU on competition within the EU? Why?
One effect the single market and single currency on competition within the EU is an increase in competition between companies from the EU countries. As trade barriers are eliminated, it makes it easier for companies to get involved in…...

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