Regional Economic Integration, Textile Industry, and Apple Case Study
1. NAFTA has produced significant net benefits for the Canadian, Mexican, and U.S. economies. Discuss.
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?
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?
4. Do you think it is correct for the European Commission to restrict mergers between American companies that do business in Europe? (For example, the European Commission vetoed the proposed merger between World Com and Sprint, both U.S. companies, and it carefully reviewed the merger between AOL and Time Warner, again both U.S. companies.)
5. What were the causes of the 2010–2012 sovereign debt crisis in the EU? What does this crisis tell us about the weaknesses of the euro? Do you think the euro will survive the sovereign debt crisis?
6. How should a U.S. firm that currently exports only to ASEAN countries respond to the creation of a single market in this regional grouping?
7. How should a firm with self-sufficient production facilities in several ASEAN countries respond to the creation of a single market? What are the
constraints on its ability to respond in a manner that minimizes production costs?
8. After a promising start, Mercosur, the major Latin American trade agreement, has faltered and made little progress since 2000. What problems are hurting Mercosur? What can be done to solve these problems?
9. Read the second Management Focus feature in this chapter, “NAFTA’s Tomato Wars,” then answer the following questions:
• Was the establishment of a minimum floor price for tomatoes consistent with the free trade principles enshrined in the NAFTA agreement?
• Why, despite the establishment of a minimum floor price, have imports from Mexico grown over the years?
• Who benefits from the importation of tomatoes grown in Mexico? Who suffers?
• Do you think that Mexican producers were dumping tomatoes in the United States?
• Was the Commerce Department right to establish a new minimum floor price, rather than scrap the agreement and file an anti dumping suit? Who would have benefited from an antidumping suit against Mexican to-
mato producers? Who would have suffered?
• What do you think will be the impact of the new higher floor price? Who benefits from the higher floor price? Who suffers?
• What do you think is the optimal government policy response here? Explain your answer
