The Challenge of European Integration: Internal and External Problems of Trade and Money by unknow

Author:unknow
Language: eng
Format: epub
Tags: Economics & Trade, International, Political Science, Political Freedom, Business & Economics, Security (National & International)
ISBN: 9780367306052
Google: rG1pzgEACAAJ
Goodreads: 57864707
Publisher: Routledge
Published: 2021-05-31T00:00:00+00:00

Regional and Sectoral Implications

The picture gets more complicated when one takes a disaggregate look by country groups or industry sectors. Semi-industrial non-bloc members have reason to be apprehensive about EC 1992 and NAFTA. While the trade expansion effects of growing regional economies is a welcome prospect, the dark clouds of trade diversion loom on the horizon especially with respect to the nascent skill-intensive or high-technology exports from the upwardly-mobile developing countries.

The ACP as well as the resource-rich countries stand to enjoy modest gains, especially from the EC, for several reasons. For one, many of their resource-based exports are non-competitive with EC goods. Secondly, the GSP preferences and the Multifibre Agreement will continue to provide them with preferential access to developed-country markets although the restrictions are frustrating to those members with strong capability for exporting manufactures.

An emerging concern of the poorest countries and second-tier NICs lies in the area of aid- and investment-diversion to post-socialist countries which, after a couple of years of restructuring, will likely become formidable competitors. India and China are, of course, in a class by themselves. Their interest lies in a depoliticized multilateral trading system that would grant them market access for simple consumer goods and selected high-technology goods (especially in the case of India) without compromising their political ambitions or their special interest in accelerating technological transfers. These considerations help explain their special concern with issues of protection of intellectual property rights and market access for non-traditional manufactures.

The best-case scenario of "open" regionalism and a successful Uruguay Round will be a boon for those developing economies which have built up a threshold of industrial bases and considerable international marketing experience. These countries, exemplified by E. Asia, have the economic flexibility to adjust to ever-changing world market conditions. Exclusionary Northern regionalism and foot-dragging at the GATT would likely have the effect of reinforcing defensive regionalism, one that is strong enough to overcome intraregional animosities (Anderson 1991).

The most constrained response to this "new-new" international economic order comes from SSA. The combination of poor initial conditions and misguided policies have plunged SSA into an economic quagmire. The deterioration of infrastructure and the atrophying of state institutions have advanced to such a point that the differences in growth performance between reforming and non-reforming countries are hardly noticeable. Ironically, the porous national borders and the phenomenal expansion of the informal economy have created in much of Africa a non-legal regional integration of the most "advanced" (i.e., laissez-faire) type, though involving high transactions costs.

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