Describe the following key regional market zones: European Union, MERCOSUR, NAFTA, and ASEAN. What countries do they include, what benefits do they have, and have they been successful?

Question

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Answer 1

The European Union is the most successful regional market zone and it is also one of the oldest. Founded more than 50 years ago by six countries (Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany) with the Treaty of Rome, the EU now includes 28 countries spanning all of Europe. The EU is one of the most dominant economic entities in the world, with economic output approximately equal to that of the United States, but it is not without challenges. Its currency, the euro, has been considered one of the strongest in the world. Despite the challenges it faces, the EU maintains a great deal of power over member states, with the ability to enact laws, impose taxes, and exert tremendous social influence in the lives of citizens. 

MERCOSUR, the most powerful market zone in South America, was inaugurated in 1995 and includes Argentina, Bolivia, Brazil, Chile, Paraguay, and Uruguay. With over 200 million people and a combined GDP of more than $1 trillion, it is currently the third-largest free trade area in the world.9 One of the drawbacks has been a limited transnational transportation network, which restricts the movement of goods between member countries. However, MERCOSUR has overcome this problem by successfully leveraging the combined economic power of the individual member countries and creating additional economic benefits for its members.

The most significant market zone in the Americas is the alliance of the United States, Canada, and Mexico, which is commonly referred to by the treaty that created the alliance, NAFTA (North American Free Trade Agreement). NAFTA created the single largest economic alliance and has eliminated tariffs between the member countries for more than 19 years. Many industries, such as automaking, have manufacturing plants in Mexico to supply the U.S. market. Retailers have also benefited; Gigante, a large Mexican supermarket chain, operates in the United States while Walmart, a U.S. company, has over 800 stores in Mexico. 

The most important Asian market zone is ASEAN, which was founded in 1967 and comprises 10 countries in the Pacific Rim (Brunei Darussalam, Indonesia, Malaysia, Philippines, Cambodia, Laos, Myanmar, Singapore, Thailand, and Vietnam). After the 1997-1998 Asian financial crisis, the group added China, Japan, and South Korea. While the relationships with these "plus 3" countries are less developed than among the full member countries, the combined economic activity of all participants makes ASEAN a powerful global economic force. ASEAN is currently leading talks to create an Asian free-trade area that would encompass "30 percent of the world's total export volume." The Regional Comprehensive Economic Partnership would be second only to the WTO in size.