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1、McGraw-Hill/Irwin Copyright 2013 by The McGraw-Hill Companies, Inc. All rights reserved.Europe, Africa, andthe Middle EastChapter 1010-*Learning ObjectivesLO1 The reasons for economic unionLO2 Patterns of international cooperationLO3 The evolution of the European UnionLO4 Evolving patterns of trade
2、as eastern Europe andthe former Soviet states embrace free-market systemsLO5 Strategic implications for marketing in the regionLO6 The size and nature of marketing opportunities in the European/African/Middle East regions310-*Regional Market Regions and Regional Economic Cooperation Multinational ma
3、rket regions are groups of countries that seek mutual economic benefit from reducing interregional trade and tariff barriersare the most important global trends today The most successful one is the European Union (EU), the worlds largest multinational market region and foremost example of economic c
4、ooperation Multinational market groups form large markets that provide potentially significant opportunities for international business.10-*La Raison dEtre Successful economic union requires favorable economic, political, cultural, and geographic factors as a basis for success The advantages of econ
5、omic union must be clear-cut and significant Benefits must greatly outweigh the disadvantages before nations forgo any part of their sovereignty510-*Economic Factors Usually markets are enlarged through preferential tariff treatment for participating members, common tariff barriers against outsiders
6、, or both Enlarged, protected markets stimulate internal economic development External and internal barriers are reduced because of the greater economic security afforded to domestic producers For a union to survive, it must have agreements and mechanisms in place to settle economic disputes.Politic
7、al FactorsPolitical amenability among countries is another basic requisite for the development of a market agreementTypically, marketing arrangements are made in response to external political threatsParticipating countries must have comparable aspirations and general compatibility before surrenderi
8、ng any part of their national sovereignty610-*Geographic and Temporal Proximity Although not absolutely imperative for cooperating members of a customs union, such closeness facilitates the functioning of a common market More important than physical distance are differences across time zones Trade t
9、ends to travel more easily in northsouth directions than it did in ancient times Transportation networks are interrelated and well developed when countries are close together Issues of immigration, legal and illegal, also promote closer economic integration10-*Cultural Factors Cultural similarity ea
10、ses the shock of economic cooperation with other countries Members understand the outlook and viewpoints of their colleagues Language, as a part of culture, has not created as much a barrier for EU countries as was expected Nearly every educated European can do business in at least two or three lang
11、uages Religion, however still seems to be an issue, as evidenced by the impending membership of turkey into the EU Key members share a long-established Christian heritage10-*Patterns of Multinational Cooperation10-*Regional Cooperation Groups The most basic economic integration and cooperation is th
12、e regional cooperation for development (RCD) Governments agree to participate jointly to develop basic industries beneficial to each economy Each country makes an advance commitment to: participate in the financing of a new joint venture to purchase a specified share of the output of the venture10-*
13、Free Trade Area A free trade area (FTA) requires more cooperation and integration than the RCD It is an agreement between two or more countries to reduce or eliminate customs duties and nontariff trade barriers among partner countries Members maintain individual tariff schedules for external countri
14、es. An FTA provides its members with a mass market without barriers to impede the flow of goods and services1110-*Customs Union A customs union represents the next stage in economic cooperation It enjoys the free trade areas reduced or eliminated internal tariffs and adds a common external tariff on
15、 products imported from countries outside the union. The European Union was a customs union before becoming a common market Customs unions exist between France and Monaco, Italy and San Marino, and Switzerland and Liechtenstein, to name some examples.1210-*Common Market A common market agreement eli
16、minates all tariffs and other restrictions on internal trade Adopts a set of common external tariffs, and removes all restrictions on the free flow of capital and labor among member nations It is a unified economy and lacks only political unity to become a political union1310-*Political Union Politi
17、cal union is the most fully integrated form of regional cooperation It involves complete political and economic integration, either voluntary or enforced The most notable enforced political union was the Council for Mutual Economic Assistance (COMECON), a centrally controlled group of countries orga
18、nized by the Soviet Union Two new political unions came into existence in the 1990s: the Commonwealth of Independent States (CIS), made up of the republics of the former Soviet Union, and the European Union (EU)1410-*Global Markets and Multinational Groups The restructuring of the eastern European b
19、loc into independent market-driven economies The dissolution of the Soviet Union into independent states The worldwide trend toward economic cooperation Enhanced global competition All of these warrant the study of three multinational regions: Europe, Africa and Middle East10-*Europe and European In
20、tegration Within Europe, every type of multinational market grouping exists: The European Union European Economic Area, The European Free Trade Area No other group is more secure or more important economically than the EU It has made progress toward achieving the goal of complete economic integratio
21、n and, ultimately, political union There are language and cultural differences, individual national interests, political differences, and centuries-old restrictions designed to protect local national markets Historically, standards have been used to effectively limit market access to individual coun
22、tries (Germany: Beer, Italy: Pasta)16Exhibit 10.1 European Market Regions Fundamental Market Metrics(in parentheses) = average annual growth rate 20062011 as a percentage*Current U.S. $. *eEurozone. Source: Euromonitor International, 2012; World Bank, 2012.10-1610-*European Union Even though several
23、 member states are not fully implementing all the measures, they are making progress The proportion of directives not yet implemented in all 27 member states has fallen dramatically Taxation has been one of the areas where implementation lags and reform continues to be necessaryEU InstitutionsIt has
24、 executive, parliamentary, and judicial branches: the European Commission: initiates policiesthe Council of Ministers: is the decision-making body of the European Unionthe European Parliament: can amend and adopt legislation the Court of Justice: is responsible for challenging any measures incompati
25、ble with the Treaty of Rome, for passing judgment at the request of a national court, on the interpretation or validity of points of EU law1810-*Economic and Monetary Union (EMU) The EMU, a provision of the Maastricht Treaty, established the parameters of the creation of a common currency for the EU
26、, the euro Established a timetable for its implementation In 2002, a central bank was established, conversion rates were fixed, circulation of euro banknotes and coins was completed The 12 member states employed the euro beginning in January 1, 2001, some did not join voluntarily10-*Expansion of the
27、 European Union Ten new countries were added in 2004, some ahead of schedule Bulgaria and Romania entered as planned in 2007 Talks with Turkey, Macedonia, and Croatia are continuing Negotiations with Turkey have had their ups and downs, but the Muslim majority nation has economically benefited from
28、its new openness In 2007 the European Union celebrated its golden anniversary The 20082009 global recession has posed daunting short-term challenges to the integrity of the Union An early recovery stalled in late 2009; and Ireland, Portugal, Spain, and particularly Greece are experiencing continuing
29、 problems.10-*Long Term Challenges for the EU The long term challenges facing the Union in the next 50 years appear to fall into three categories: improving the Unions economic performance deciding how to limit the political aspect of union and deciding about further enlargement2110-*Eastern Europe
30、Most eastern European countries are privatizing state-owned enterprises Establishing free market pricing systems Relaxing import controls But struggling with inflation The very different paths taken toward market economies have resulted in different levels of progressBaltic StatesThe Baltic statesEs
31、tonia, Latvia, and Lithuaniaare a good example of the difference that the right policies can makeAll three countries started off with roughly the same legacy of inefficient industry and Soviet-style command economiesGovernment bureaucracy, corruption, and organized crimecommon problems found in the
32、countries of the former Soviet Union continueThese issues represent the most significant hurdles to U.S. trade and investment2210-*Commonwealth of Independent States The first Soviet republics to declare independence were the Baltic states The remaining 12 republics of the former USSR, collectively
33、known as the Newly Independent States (NIS), regrouped into the Commonwealth of Independent States The CIS is a loose economic and political alliance with open borders but no central government2310-*Africa Recent global economic problems have not impeded the growth among African countries Ethiopia,
34、Angola, and Malawi each experienced annual growth rates of greater than 8 percent between 2007 and 2011 Several other countries in the sub-Saharan region have grown faster than 5 percent annually However, Africas multinational market integration activities can be characterized as a great deal of act
35、ivity but little progress Despite the large number and assortment of paper organizations, there has been little progress towards economic integration because of political instabilityMiddle East/North Africa (MENA)The ongoing political turmoil in Middle East/North Africa (MENA) region accelerated in
36、2011 and has resulted in economic disaster in several countries in the regionThe Arab Common Market set goals for free internal trade but has not really succeededThe aim was to integrate the economies of the 22 Arab countries, but a long history of border disputes, and internal political turmoil wil
37、l have to be overcome.The Arab Gulf states, Egypt, and Morocco formed an Arab Free Trade Area, sometimes called the Greater Arab Free Trade Area (GAFTA)Iran, Pakistan, and Turkey, formed the Regional Cooperation for Development (RCD), recently renamed to the Economic Cooperation Organization (ECO)Th
38、e organization, led by Iran, is the Organization of the Islamic Conference (OIC), a common market composed of Islamic countries2410-*Implications of Market Integration Multinational provide opportunity through access to greatly enlarged markets Production, financing, labor, and marketing decisions are impacted World competition will continue to intensify as businesses become stronger and more experienced in dealing with large market groups. Regulation of bus
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