The paper 'Regional Economic Integration' is a great example of a Macro and Microeconomics Literature Review. It is conventional knowledge that the world economy has increasingly been riddled with a strong wave of intensified economic integration especially within the sunset years of the twentieth century. Globalization parameters such as the development in trade and the liberalization of capital accounts, in tandem with technological innovation, have greatly internationalized the exchange of the factors of production and the inherent trade (Fernandez & Mommen, 2002). Although many discourses have been coined to in support of the process of globalization as the liberalizing vehicle, there has been a parallel growth in the economic grouping within geographic regions.
This implies that as the world becomes more globalized, it is concurrently becoming more regionalized. The increased recognition of regional economic blocs through regional policy initiatives in trade has energized the trend toward regional economic integration. Despite the proliferation and increased value in the regionalized trade zones, economic integration bears unanswered questions that underlie the thesis of this paper. This critical analysis explores and details the discourse of regional economic integration and its underlying implications on the liberalization of the global market.
Particularly, the paper will interrogate the emerging questioning of the discourse as a building block, or is it a barrier of global integration. Economic Blocs and Free Trade Agreements The primary theme promoted by regional economic integration is that the core principles (openness and non-discrimination) bolstering the integration reflect the common goal, though at a slow pace of building a global free market. According to Frankel, Stein, and Wei (1997), before painting the bigger picture of global integration, it is worthwhile visiting some of the important preconditions for regional economic integration arrangement in order to form a clearer analogy for assessment of the role the blocs in the eventual destiny of liberalized markets.
For the purpose of this work, frequent inferences will be made on the European Union (EU) and the trade blocs in Eastern Asia because of their apparent force as regards the match towards global integration. It is crucial to note that while the goals and processes of initiating the regional economic blocs and free trade agreements may be similar in different geographical regions, the end products may be a distance apart.
For instance, the EU model of integration yielded more to policy-drivers in which attention from institutions and governments helped make the integration processes the basis of integral institutions and agreements. However, owing to differences in institutional and governmental support for the East Asian integration model, it has come out as a market-driven regional economic outfit (Frankel, Stein and Wei, 1997). The East Asian economic bloc has been a fertile ground for analysis of the potential outcomes: global integration or strong stand lobe economic blocs.
This bloc is driven by markets and the corporate linkages, which is strengthened by the development of the resilience of regional and foreign corporate production networks. According to Frankel, Stein, and Wei (1997), corporate internationalization and increased market liberalization have built intra-industry trade in a myriad of aspects and reflect greater advancement toward more production-sharing strategies and the evolution of more cross-frontier agreements promoting global integration.
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